Fannie Mae: ‘Resilient Economy Overcomes Risks to Drive Housing’

first_img Economy Fannie Mae Growth 2020-01-21 Seth Welborn Share Save Servicers Navigate the Post-Pandemic World 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Previous: Keeping Afloat in Financial Services Law Next: Low-End Rents Prop Up Single-Family Rent Growth 2020 is forecasted to see growth of 2.1%, according to the latest commentary from the Fannie Mae Economic and Strategic Research (ESR) Group. Housing, the ESR Group notes, is one of the key factors driving growth, alongside consumer spending and business fixed investment.“While we believe the strength and resilience of the American consumer is the lynchpin of near-trend GDP growth, this year we expect consumer demand to re-establish housing construction as a significant contributor to economic growth—hence our theme for the year: A resilient economy overcomes risks to drive housing,” said Fannie Mae SVP and Chief Economist Doug Duncan. “Strong labor markets, rising wages, and improved household balance sheets offer consumer spending upside potential, including the ability to withstand minor economic disruptions.”Fannie Mae expects the growing economic strength from housing that emerged in 2019 to carry into the rest of 2020, including solid growth in single-family construction spending and low mortgage rates.Recent studies have indicated that this increased residential construction spending could help limit the negative effects of capital-spending weakness, despite not taking up a large segment of the economy. According to Bloomberg utilizing data from the Atlanta Fed, the stronger U.S. housing market could provide a cushion from the effect of a “derailment” in corporate spending.Bloomberg notes that recent earnings announcements show order books are growing at a few builders, including Lennar Corp.“The indicators that we see and hear from our customers reflect confidence in the stability of the economy and in the job market,” Stuart Miller, Lennar’s Chairman, said on the company’s recent earnings call.While housing remains the bright spot in economic growth, the Fannie Mae ESR Group also identified which factors may cause a trend to the downside, including geopolitical tensions. For example, as analysis from First American Financial Corporation notes, global uncertainty—such as the conflict between the U.S. and Iran—impacts not only geopolitical relations but also the U.S. housing market. However, Duncan noted what is offering “greater balance” in the latest ESR Group forecast.“Simmering geopolitical tensions, trade concerns, potential equity overvaluation, and weakening manufacturing data suggest the risks to our forecast are skewed slightly to the downside, while accelerating global growth and consumer spending power offer upside and greater balance than in previous forecasts,” said Duncan. “We also continue to expect the Fed to maintain its hands-off approach to monetary policy in the new year, with no changes to the target federal funds rate despite persistently low inflation.” Demand Propels Home Prices Upward 2 days ago Tagged with: Economy Fannie Mae Growth in Daily Dose, Featured, Government, Investment, News January 21, 2020 2,486 Views About Author: Seth Welborn The Week Ahead: Nearing the Forbearance Exit 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days agocenter_img The Best Markets For Residential Property Investors 2 days ago Sign up for DS News Daily Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer. The Best Markets For Residential Property Investors 2 days ago  Print This Post Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Related Articles Demand Propels Home Prices Upward 2 days ago Home / Daily Dose / Fannie Mae: ‘Resilient Economy Overcomes Risks to Drive Housing’ Data Provider Black Knight to Acquire Top of Mind 2 days ago Fannie Mae: ‘Resilient Economy Overcomes Risks to Drive Housing’ Subscribelast_img

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