Economy Accelerates, Will Housing Follow?

According to the latest release from Fannie Mae’s Economic & Strategic Research Group, economic growth rebounded beyond expectation during the second quarter. Combined with an upward revision to first quarter activity, the improvement indicates the economy is growing slightly faster than originally forecast. Doug Duncan, Fannie Mae’s chief economist, said the August outlook supports the expectation that the second half of the year will push full-year growth into positive territory. Unfortunately, despite the good economic news, the housing market’s contribution has been disappointing. Duncan believes housing activity has suffered due to severe weather in the first half of the year and the impact on mortgage rates from the expectation that the Federal Reserve would soon begin tapering their securities purchases. These factors have led to very little seasonal growth in the residential real-estate market. But though Fannie Mae expects home sales to finish lower this year than last, they also expect 2015 to be stronger than both 2013 and 2014. More here.

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