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Press Release

Tight Supply, Rising Mortgage Rates, and High Prices Slowed 2018 Home Sales, Lenders Say

January 30, 2019


Matthew Classick


WASHINGTON, DC – An insufficient supply of homes for sale, rising interest rates, and high prices sapped home sales in 2018, according to a Fannie Mae survey of mortgage lenders conducted in the fourth quarter. The surveyed senior mortgage executives said increasing the housing stock and offering consumer subsidies, such as a first-time homebuyer tax credit, could improve affordability for low- and moderate-income homebuyers.

Fannie Mae's latest Mortgage Lender Sentiment Survey® (MLSS) included a special section to better understand the drivers behind tepid 2018 home sales growth, as well as ways to improve affordability for low- and moderate-income homebuyers. The survey found that 48 percent of lenders polled said the primary reason for slow home sales growth last year was "an insufficient supply of homes available for sale," while 24 percent of lenders tied the slowdown to rising interest rates. Twenty percent said high home prices hurt sales. Only 2 percent of lenders believed that "insufficient consumer income" was behind the decline in home sales, while another 2 percent reported that a "lack of mortgage products tailored for first-time buyers or low- to moderate-income families" drove the decline.

When asked for the most helpful idea to improve affordability for low- and moderate-income homebuyers, 45 percent of lenders surveyed cited "increasing the supply of housing stock," 18 percent cited "offering consumer subsidies," and 10 percent cited "offering more loan choices."

The subsidies to consumers could come in the form of down payment assistance, assistance for closing costs, or a first-time homebuyer tax credit. Increasing the housing stock could be assisted by easing zoning regulations and density restrictions and renovating existing stock.

Finally, lenders reported that Fannie Mae and Freddie Mac could help alleviate the housing affordability gap with grants and incentives to fund affordable development. Other suggestions from those surveyed included consolidating and standardizing state and local down payment assistance programs and offering closing costs assistance, as well as mortgage loans to fund renovations and special loan programs for first-time home buyers.

The fourth quarter MLSS was conducted between October 31 and November 12.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit and follow us on