For real estate agents, 2017 has proved to be an interesting year, with shifts and changes, including two hurricanes that have impacted markets in Texas and Florida.
With an eye on 2018, Fannie Mae has increased its full-year forecast for 2017 as hurricane recovery promises to increase economic growth.
According to Housingwire, the government-sponsored enterprise increased its forecast from 2.2 percent to 2.4 percent for the year following the strong third-quarter gross domestic product, according to its Economic and Strategic Research Group’s November 2017 Economic and Housing Outlook.
Fannie Mae Chief Economist Doug Duncan pointed out that the third quarter economic growth showed surprising resiliency. The expected economic hit from the recent natural disasters either failed to materialize or was drowned out by business optimism.
“Recent data showed a stronger pickup in domestic demand than anticipated, leading us to increase our growth forecast for the final quarter of this year and coming quarters. We also revised higher our 2018 growth forecast to 2 percent.”
However, the outlook isn’t as positive for the housing market, which is expected to create a drag on GDP for the third consecutive quarter. Duncan said the lack of housing inventory continues to make buying a home less affordable.
“Tax cuts, if enacted, present upside risk to our growth forecast for next year but could also lead to more aggressive Fed action. Housing still remains a drag on the economy, as shortages of labor and available lots, coupled with rising building material prices, further complicate existing inventory, affordability, and sales challenges.”
Moreover, Federal Research Chair nominee Jerome Powell, if confirmed by the Senate, will gradually continue monetary policy normalization, Duncan said. Fannie Mae continues to predict the Fed will announce its third rate hike in December’s Federal Open Market Committee meeting, and will raise rates twice in 2018.
