On Tuesday, Fannie Mae will release its May 2017 Economic and Housing Outlook report. The Outlook is a forecast of economic trends in the housing and mortgage-finance markets, analyzing current and historical data.
The previous Outlook from April 2017 saw weak overall economic patterns, while housing activity stayed relatively strong, which Fannie Mae ties to warmer weather. Moving forward, the GSE’s Economic & Strategic Research Group, the compilers of the Outlook, expect the spring and summer selling season to see an uptick in listings, and declining mortgage rates should contribute to this factor.
“Our economic forecast remains unchanged in April as we continue to await details on the new Administration’s plans,” said Fannie Mae Chief Economist Doug Duncan in the April report. “We’re intrigued by the disparity between elevated consumer and business optimism and signs of decelerating first quarter economic growth. However, we expect growth to rebound this quarter as special factors that weighed on growth partially unwind. With the firming of the Fed’s favored measure of inflation, reduced labor market slack, and the more hawkish tone of the Federal Open Market Committee at its March meeting, we foresee that the Fed will hike rates two more times this year, in June and September, and announce a change to its reinvestment policy in December.”
Fannie Mae’s Economic & Strategic Research Group is looking positively into the summer. Consumer sentiment and employment is improving, but the possibility of further Fed rate hikes could dampen the market. However, forward looking indicators such as pending home sales have reached near-record levels, and applications have reached pre-Recessions levels.
This Week’s Schedule
National Association of Homebuilders Housing Market Index, Monday, 10 a.m. EST
Housing Starts, Tuesday, 8:30 a.m. EST
The Collingwood Group Chairman Tim Rood on Fox Business Network’s Cavuto, Tuesday, 12 p.m. EST
MBA Mortgage Applications, Wednesday, 7 a.m. EST