A Soft Start to 2015, but Acceleration Expected
Modest Housing Expansion Expected in 2015, Despite Weak Outset
WASHINGTON, DC – Economic growth took a hit in the first quarter of 2015 due to temporary factors, including the West Coast port strike and tough winter weather in parts of the country. Nevertheless, much of the economic activity expected at the beginning of the year should shift into the second quarter with growth strengthening in coming quarters, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research (ESR) Group. Upbeat labor market conditions and positive consumer and business fundamentals should push growth to 2.8 percent this year, while slowing global growth abroad, geopolitical events, and increased financial volatility domestically due to speculation around the target fed funds rate loom as downside risks to growth.
"We continue to expect the economy to drag housing upward as we move into the second quarter. The economy is getting a boost from the strong employment numbers we’ve seen last year and at the start of 2015. When this employment growth partners with income growth and consumers experience a rise in their personal household income, we should see a similar boost in the housing sector," said Fannie Mae Chief Economist Doug Duncan. "Overall, we expect an improving 2015 with continued economic growth bringing housing above 2014 levels."
Visit the Economic & Strategic Research site at www.fanniemae.com to read the full March 2015 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary.
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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