WASHINGTON, June 23, 2015 /PRNewswire/ -- Recent
indicators suggest that the U.S. is experiencing a moderate rebound
in economic growth in the current quarter following a temporary
drop in activity in the first quarter, according to Fannie Mae's
(OTC Bulletin Board: FNMA) Economic & Strategic Research (ESR)
Group. The strong U.S. dollar and challenges in the oil and gas
industry will likely produce some ongoing headwinds in the near
term. However, the continued strengthening in employment and
household income, as well as the return to more normalized weather
patterns, are expected to help economic growth climb to 2.4 percent
annualized in the second quarter before accelerating in the second
half of the year to an average of 3.0 percent.
"The first-quarter slump wreaked more havoc than expected,
particularly as real consumer spending grew only 1.8 percent
annualized despite significant savings at the gas pump," said
Fannie Mae Chief Economist Doug
Duncan. "We adjusted our full-year growth projection down to
1.9 percent from 2.3 percent in the prior forecast, in light of the
downward revision to first-quarter GDP. However, our forecast for
the current quarter and the rest of the year is little changed as
recent developments support our expectations for a second-quarter
pick-up. Labor market conditions are providing more near-term
support for consumers, indicating that the acceleration in income
growth this year should be sustainable. Additionally, the decline
in gas prices could lead to a delayed boost in consumer spending as
we saw in May with auto sales posting the strongest pace in nearly
a decade, further signaling that consumer spending is gearing up
for a rebound."
"Our forecast for housing and mortgage activity remains
unchanged amid continued improvement seen at the start of the
second quarter," said Duncan. "We expect total housing starts and
total home sales in 2015 to rise about 10 and 5 percent,
respectively, with mortgage originations increasing approximately
23 percent to $1.46 trillion. Given
the uneven economic growth in the U.S. and slow growth around the
globe, interest rates are unlikely to surge. This should enable the
housing market to better withstand some headwinds from higher rates
this year than in the past."
Visit the Economic & Strategic Research site at
www.fanniemae.com to read the full June
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/economic-rebound-on-the-horizon-with-q1-slump-in-rearview-mirror-300103037.html
SOURCE Fannie Mae