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Home | Daily Dose | Fannie Mae Forecasts Slowdown in Growth for Remainder of 2014
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Fannie Mae Forecasts Slowdown in Growth for Remainder of 2014

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Despite an anticipated pickup in economic growth and housing recovery in the second half of this year,Fannie Mae expects the economy to grow at just 1.5 percent overall this year. Fannie revised its previous estimate of 2.1 percent growth for 2014 after a disappointing start to the year. The first quarter of this year measured "the worst performance in five years;" and if Fannie's 1.5 percent prediction pans out, it would be "the worst performance of Q4-over-Q4 growth in the current economic expansion," according to Doug Duncan, chief economist at Fannie Mae. Lower-than-expected healthcare spending was the culprit in first-quarter economic woes; but consumer spending, business capital investment, and residential investment should all contribute to more robust growth in the second half of this year, according to Fannie Mae's economists. Job growth and real personal income are growing, which Fannie expects to translate to a rise in consumer spending over the second half of the year. "We expect the economy to grow approximately 3.0 percent in the second half of the year, although there is an element of uncertainty given government statisticians' difficulty in assessing the full scope of healthcare expenditures," Duncan said. The housing market is continuing to recover, contributing positively to the economy, but Fannie Mae anticipates a 2.0 percent decline in home sales and a 41.0 percent decline in mortgage originations over the year this year. On the other hand, single-family mortgage debt outstanding should increase "slightly," according to Fannie Mae.

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About Author: Krista Franks Brock

Krista Franks Brock
Krista Franks Brock is a regular contributor to DSNews.com and TheMReport.com. She previously served as managing editor of DS News magazine. Prior to joining DS News, she was managing editor of Southern Distinction, a regional lifestyle magazine based in Athens, Georgia. She is currently a freelance writer and editor for various online and print publications. She holds degrees in journalism and art from the University of Georgia, where she also earned a minor in Spanish.

One comment

  1. As a realtor, I would like to see another good year or two, but a slow down isn’t bad either. As long as words like crash or great recession aren’t used, I think we can handle it. A slow down in the real estate market is like a pull back in the stock market. It is healthy. It keeps speculation in check.

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