Fannie: Economy to Strengthen in Second Half
July 24, 2015
Economic activity is expected to accelerate in the second half of the year, according to Fannie Mae's Economic & Strategic Research Group.
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"We believe consumer spending will be the largest contributor to growth for the remainder of the year, particularly as consumers' confidence, household net worth, and income growth prospects have continued to strengthen amid an improving jobs market," says Doug Duncan, Fannie Mae's chief economist. "On the downside, the drop in oil prices will likely continue to weigh on nonresidential investment in structures, and on balance we expect net exports to be a drag on growth this year, due in large part to the debt crisis in Greece and deteriorating economic conditions in China."
Fannie Mae economists continue to expect the housing market to remain part of that economic strength.
"We expect to see strong sales, lean inventories, and rising confidence through the rest of the year, which should support increased home building activity and give an added boost to economic growth," Duncan says. "Although a lack of skilled labor may hurt construction activity, our forecast calls for housing starts to average 1.12 million units. We expect existing and new home sales to climb by approximately 5 and 25 percent, respectively, and total mortgage originations to rise approximately 24 percent to $1.46 trillion, with a refinance share of 47 percent."
Source: Fannie Mae
Updated: August 15, 2018