Housing, Economy Go Hand-In-Hand In Journey To Normal Levels

14780_picresized_1387567900_165084321 Housing, Economy Go Hand-In-Hand In Journey To Normal Levels Recent data shows that the economy and the housing market continue to transition to more normal levels of activity and are poised to gather further momentum heading into the new year, according to Fannie Mae's Economic & Strategic Research Group.

In particular, as uncertainty surrounding fiscal and monetary policy wanes, consumer spending and manufacturing activity should improve and contribute to additional housing growth, according to Fannie Mae.

Real economic growth is expected to come in at approximately 2.2% for all of 2013 – which is roughly in line with the group's forecast at the beginning of this year, with an increase to 2.7 % expected next year, says Fannie Mae.

Doug Duncan, chief economist for Fannie Mae, comments, ‘With regard to housing, we expect that the improving employment picture next year will be accompanied by a sustained increase in interest rates – which, in turn, will roll over into the mortgage market.

‘While that will likely drag on housing growth expectations, we believe the housing recovery will continue on a modest upward trend toward more normal levels. Our forecast calls for additional home price increases next year, although declining investor demand and other factors are expected to slow the pace of appreciation," he continues.

"Overall, 2013 housing indicators have shown about the performance we expected, and we believe that their gradual march toward normal will continue into 2014.’


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