{"id":11985,"date":"2023-08-15T18:03:26","date_gmt":"2023-08-15T18:03:26","guid":{"rendered":"https:\/\/microloannexus.com\/personal-finance\/housing-market-to-provide-a-downside-cushion-for-us-economy-fannie-mae\/"},"modified":"2023-08-15T18:03:28","modified_gmt":"2023-08-15T18:03:28","slug":"housing-market-to-provide-a-downside-cushion-for-us-economy-fannie-mae","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=11985","title":{"rendered":"Housing market to provide a “downside cushion” for US economy: Fannie Mae"},"content":{"rendered":"
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A recession is still in the cards for the U.S. economy, but the housing market’s resilience is likely to make it not that bad, according to a recent Fannie Mae\u00a0economic forecast report.<\/p>\n

Fannie Mae continued to forecast a modest recession beginning in the fourth quarter of this year or the first quarter of 2024, but said that housing is the backbone that would support any downturn in the U.S. economy.\u00a0<\/p>\n

Underpinning the strength of the U.S. housing market is a limited supply of homes that have exceeded prior expectations and strong buyers’ demand, the mortgage giant said.<\/p>\n

This dynamic has helped prop up prices, despite\u00a0earlier predictions to the contrary. As a result, Fannie Mae revised home price growth to increase 3.9% in 2023 instead of dropping 1.2% in 2023. And in 2024, a drop of 0.7% is expected instead of an earlier forecasted 2.2% decrease.<\/p>\n

“As we noted in our\u00a0April 2022 forecast, whether there is a mild recession (our base case) or a soft landing, the supply issues in housing will provide a downside cushion for economic activity,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a\u00a0statement. “That is playing out quite close to forecast on existing homes, but new construction has been even more supportive than we expected.”<\/p>\n

If you are looking to take advantage of the current mortgage rates by refinancing your mortgage loan, or are ready to shop for the best rate on a loan, consider visiting an online marketplace like Credible to compare rates and get preapproved with multiple lenders at once.<\/p>\n

COST IS THE BIGGEST FACTOR BEHIND WHY A MAJORITY OF AMERICANS DELAY MEDICAL CARE: SURVEY<\/strong><\/p>\n

Inflation to linger throughout 2023<\/strong><\/h2>\n

Despite the continued expectation of a recession, Fannie Mae increased its fourth-quarter gross domestic product (GDP) forecast to call for 1.1% year-over-year growth, up from 0.1%, mainly reflecting a more robust than previously anticipated first half of this year.<\/p>\n

Inflation\u00a0is also predicted to end the year at around 3.1% \u2013 it dropped 3% in June, the lowest level in more than two years, according to Fannie Mae.\u00a0\u00a0<\/p>\n

However, reaching the Federal Reserve’s 2% target rate might take longer, Fannie Mae said. As long as\u00a0wage growth\u00a0and\u00a0GDP\u00a0remained strong, the central bank’s policy will remain tight for 2023.<\/p>\n

“The Fed’s policy tightening in an effort to quell inflation is probably close to finished, although their guidance is really more current than forward, and incoming data will be determinant,” Duncan said. “The decline in headline inflation is encouraging, but year-over-year measures will work against further progress in the second half of 2023. Thus, we expect the Federal Reserve will stick to a ‘higher-for-longer’ policy after one or two more quarter-point increases until they conclude that the core inflation rate is sustainably at their 2-percent target.”<\/p>\n

If you are struggling in today’s economy, you could consider taking out a personal loan to help you pay down your debt at a lower interest rate, saving you money each month. Visit Credible to find your personalized interest rate without affecting your credit score.<\/p>\n

MAJORITY OF HOMEBUYERS SAY THEY HAVE REGRETS: SURVEY<\/strong><\/p>\n

Housing remains out of reach for many<\/strong><\/h2>\n

Mortgage rates have hovered between 6% and 7% since the start of the year and\u00a0are likely to remain there\u00a0as long as the Fed maintains its interest rate hikes.\u00a0<\/p>\n

“Putting aside any temporary volatility, we expect mortgage rates to stay higher as well,” Duncan said. “While spreads have come in a bit recently, they remain well above longer-term levels, and that means rates for consumers will likely stay elevated.”<\/p>\n

As far as the supply constraint, it is likely to drive new construction, according to Fannie Mae. Single-family housing starts surged 18.5% in May to a pace of 997,000 units, the highest level in a year and well above expectations. New home sales also jumped in May to 12.2%. However, it is not likely to put a damper on home prices for the rest of the year.\u00a0<\/p>\n

If you are looking to buy a home, you could get a better rate by shopping for the best rate on a loan. You can visit an online marketplace like Credible to compare rates, choose your loan term, and get preapproved with multiple lenders at once.<\/p>\n

MOST SENIORS REGRET RETIREMENT PLANNING DECISIONS, WANT DO-OVER: SURVEY<\/strong><\/p>\n

Have a finance-related question, but don’t know who to ask?<\/strong> Email The Credible Money Expert at\u00a0<\/i>moneyexpert@credible.com<\/u><\/i>\u00a0and your question might be answered\u00a0by Credible\u00a0in our Money Expert column.<\/i><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A recession is still in the cards for the U.S. economy, but the housing market’s resilience is likely to make it not that bad, according to a recent Fannie Mae\u00a0economic forecast report. Fannie Mae continued to forecast a modest recession beginning in the fourth quarter of this year or the first quarter of 2024, but<\/p>\n","protected":false},"author":1,"featured_media":11986,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[32],"class_list":{"0":"post-11985","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-featured"},"yoast_head":"\nHousing market to provide a "downside cushion" for US economy: Fannie Mae | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"A recession is still in the cards for the U.S. economy, but the housing market's resilience is likely to make it not that bad, according to a recent\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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