WASHINGTON, May 21, 2015 /PRNewswire/ -- Economic growth
is expected to pick up in the second quarter and through the second
half of 2015, but continued financial conservatism among consumers
suggests modest growth for the year, according to Fannie Mae's (OTC
Bulletin Board: FNMA) Economic & Strategic Research (ESR)
Group. The pickup from the weak first quarter will likely feel the
weight of continued negative economic fundamentals, including a
strong U.S. dollar and the lingering impacts of the decline in oil
prices last year, which have dragged on manufacturing, net exports,
and energy-related investment in equipment and structures. The
economy is projected to grow 2.3 percent for all of 2015—a
downgrade of 0.5 percentage points from the prior forecast and
similar to the modest pace seen in 2014. Housing is one sector that
appears to be building momentum, with leading indicators suggesting
the market will experience a solid spring season.
"Last year we saw a strong second quarter rebound from a weak
first quarter. We expect the same pattern this year, but a more
muted bounceback," said Fannie Mae Chief Economist Doug Duncan. "The drop in oil prices has led to
a reduction in business fixed investment, particularly in the
mining and energy extraction space, but hasn't yet translated to a
significant increase in personal spending, with consumers remaining
financially conservative by choosing to ramp up their savings or
pay down their debt. Incoming data point to some strengthening of
consumption for the second quarter. We also are seeing positive
developments in the housing space, supporting our forecast of
moderate but broad-based improvement in 2015 compared to last year.
Purchase mortgage applications have moved up consistently for a
couple of months, and while refinance applications have recently
pulled back, the actual volume of both purchase and refinance
originations earlier in the year came in stronger than we had
projected. As a result, we have raised our mortgage origination
forecast to $1.46 trillion for the
year."
Visit the Economic & Strategic Research site at
www.fanniemae.com to read the full May
2015 Economic Outlook, including the Economic Developments
Commentary, Economic Forecast, Housing Forecast, and Multifamily
Market Commentary. To receive e-mail updates with other housing
market research from Fannie Mae's Economic & Strategic Research
Group, please click here.
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
homes.
Visit us at: http://www.fanniemae.com/progress
Follow us on Twitter:
http://twitter.com/FannieMae
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/2015-economic-growth-forecast-downgraded-but-housing-on-a-better-path-300087030.html
SOURCE Fannie Mae