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Press Release

2015 Economic Growth Forecast Downgraded, but Housing on a Better Path

May 21, 2015

Katie Penote


WASHINGTON, DC – 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 (FNMA/OTC) 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 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.

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