With July approaching its last week, economists at ""Fannie Mae"":http://www.fanniemae.com/portal/index.html are maintaining their forecast for greater economic growth in the second half of 2013.
[IMAGE]In its latest Economic and Housing Outlook, Fannie Mae's Economic and Strategic Research Group points to steady year-to-date job creation, high consumer confidence, and positive housing data as proof the economy is on a positive, though modest, growth path.
""We are keeping a very close eye on the effect of rising mortgage rates on the housing market and the economy, but our July forecast is little changed from last month,"" said Doug Duncan, chief economist at Fannie Mae. ""We continue to see growth in housing, partly due to an increase in existing home sales as buyers choose to act while rates remain near historic lows.""
On the housing front, Fannie Mae predicts mortgage rates will rise gradually, averaged 4.7 percent in Q4. The surge in rates is expected to continue dragging down refinancing activity into next year.
For all of 2013, total mortgage originations are forecast to decline to $1.65 trillion from an estimated $2.03 trillion in 2012, with refinance share dropping to an estimated 62.0 percent.
Meanwhile, home sales are expected to rise 8.0 percent throughout 2013--little changed from previous forecasts.
Overall economic growth is forecast at 2.0 percent in 2013, ""underscoring an ongoing lackluster recovery."" However, ""further momentum later this year should help carry growth in 2014 to an above-par pace of 2.6 percent, the strongest since 2005,"" Duncan said.