WASHINGTON, Oct. 23, 2014 /PRNewswire/ -- Real economic
growth in the U.S. appears ready to exceed 3.0 percent for the
second half of the year, providing a sound basis for growth in
2015, according to Fannie Mae's (OTC Bulletin Board: FNMA) Economic
& Strategic Research (ESR) Group. The Group's macroeconomic
theme for 2014, Private Forces Move to the Fore,
materialized in the second quarter as reduced fiscal uncertainty
and slowing monetary intervention helped private sector momentum to
build. Although a variety of factors are slowing growth on a global
scale, which may discourage the Federal Reserve Board from making
any changes in interest rate policy until Q3 2015, the global
economic slowdown has had little negative impact on the
fundamentals of the U.S. economy so far.
"Given the expected strengthening economic activity in the U.S.
in the second half of the year, we continue to expect to finish
just above 2 percent growth for all of 2014," said Fannie Mae Chief
Economist Doug Duncan. "The risks
are tilted to the downside due to current geopolitical events in
Russia, Ukraine, Hong
Kong, and the Middle East,
as well as the economic slowdown in the Eurozone, China, and Japan. However, recent data suggest these
factors have not significantly swayed American consumers. Real
consumer spending is poised to pick up in the second half of 2014
from the first half, due in large part to improving labor market
conditions, continued declines in gasoline prices, and a subdued
pace of inflation."
"From a housing perspective, we anticipate that overall home
sales will be weaker in 2014 than in 2013. For 2015, we expect only
a moderate pickup in total home sales but enough to post the best
performance since 2007," said Duncan. "We lowered our expectation
for housing starts just slightly to 1 million units for 2014, but
our view of mortgage originations has not changed. Our estimate for
2013 was in line with the recent release of 2013 data under the
Home Mortgage Disclosure Act, and our projection of total
production in 2014 is little changed at approximately $1.1 trillion. For 2015, we are cautiously
optimistic that ongoing labor market improvements, low mortgage
rates, rising inventories, and some easing of lending standards
will boost home sales by roughly 5.0 percent. However, we still
believe housing will continue along its upward grind rather than
have the breakout year some are expecting."
For an audio synopsis of the October
2014 Economic Outlook, listen to the podcast on the Economic
& Strategic Research site at www.fanniemae.com. Visit the site
to read the full October 2014
Economic Outlook, including the Economic Developments Commentary,
Economic Forecast, Housing Forecast, and Multifamily Market
Commentary.
Opinions, analyses, estimates, forecasts, and other views of
Fannie Mae's Economic & Strategic Research (ESR) Group 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 as of the date
indicated and do not necessarily represent the views of Fannie Mae
or its management.
Fannie Mae enables people to buy, refinance, or rent a
home.
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SOURCE Fannie Mae