fannie_mae_logo-300x225The Real Estate sales is expected to inch higher, while mortgage production volume is predicted to go down , according to economists at Fannie Mae.

The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity, the mortgage giant said.

Fannie Mae Chief Economist Doug Duncan said –

Positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year. We’re entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior. Unfortunately, we expect this momentum to slow as we move through the first half of the year.

This recently released report forecast total home sales to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million. New home sales could jump 10.4% for 2012.

Mortgage originations volume in dollar terms could see a decline in 2012, largely on a steep drop in refinances. The Fannie report said total originations will fall to $1.01 trillion in 2012 from a predicted final 2011 tally of $1.36 trillion. Economists expected refinancing to plummet to $540 billion from $894 billion. I am not sure if Fannie Mae accounted for steep jump in refinances that new HARP 2.0 (Home Affordable Refinance Program) is expected to bring with it’s full launch in March 2012.

Purchase mortgages, however, will rise to $471 billion in 2012 from a estimated 2011 total of $464, according to the report.

Total single-family outstanding mortgage debt will likely drop 1.3% to $10.14 trillion in 2012.