WASHINGTON, Nov. 20, 2014 /PRNewswire/ -- Economic
growth in the U.S. is slowing from the strong mid-2014 numbers to a
more moderate pace heading into next year, but continued
improvements in employment, income, and consumer and business
spending are expected to drive year-over-year growth overall,
according to Fannie Mae's (OTC Bulletin Board: FNMA) Economic &
Strategic Research (ESR) Group. Full-year economic growth is
expected to come in at 2.5 percent for all of 2015, a modest
increase above the 2.1 percent forecast for 2014. Although the
global economic slowdown in the Eurozone, China, and Japan, as well as ongoing geopolitical events
in Russia, Ukraine, and the Middle East, remain the largest downside risks
to the forecast, the Group believes the risk of recession is
low.
"The pace of growth around the middle of the year was well above
trend, driven by an unsustainable rebound after a weak first
quarter, and we anticipate that the fourth-quarter numbers will
presage a more modest pace for 2015," said Fannie Mae Chief
Economist Doug Duncan. "We are still
seeing some conservatism on the part of consumers, who remain
hesitant to take on significant credit and mortgage debt in the
wake of the economic downturn. However, recent data show that their
confidence is growing amid strengthening employment numbers and
household incomes, which we expect to continue next year and
eventually drive stronger consumption. The Fed has responded to all
of this by ending their securities purchase program, which was
intended to support the expansion, and we don't anticipate any
change in their balance sheet until next September after they begin
to raise interest rates."
"The housing market continues to grind its way upward, but we
don't expect a breakout performance in 2015 as the fundamentals
remain somewhat muted," said Duncan. "Homebuilding activity
improved during the third quarter due primarily to the multifamily
segment, which we expect to grow further next year, but the
single-family segment has been relatively flat for some time.
Although interest rates still are relatively low, the temporary
burst in refinance activity appears to have subsided, and we expect
that the market will turn more toward the purchase market in 2015.
Overall, our view of housing starts, home sales, and home price
trends is largely unchanged from the prior forecast – we believe
that mortgage activity in 2015 will be very similar to 2014."
Visit the Economic & Strategic Research site at
www.fanniemae.com to read the full November
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.
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homes.
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SOURCE Fannie Mae