According to the November commentary from Fannie Mae’s Economic and Strategic Research (ESR) Group, economic growth is expected to slow down in the coming years, potentially leading to a mild recession in 2024. However, the group predicts that there will be a return to growth in 2025. The combination of ongoing employment gains and decelerating inflation has increased the possibility of a soft landing for the economy, but according to ESR experts, a downturn is still likely.
Fannie Mae SVP and chief economist Doug Duncan stated that after an initially strong estimate for third-quarter growth, there has been a noticeable slowdown in employment gains. This trend coupled with consumers’ potential inability sustain high levels of spending due largely to monetary policy tightening suggests an inevitable economic effect.
Duncan added that housing affordability remains under significant pressure which may lead home sales activity into recessionary levels. While current homeowners with low mortgage rates may not be inclined towards listing their homes on market anytime soon due this pressure; modest downward trends are expected for mortgage rates throughout 2024 which could help stimulate gradual recovery within home sales by 2025.
The article “Fannie Mae Sees Return To Economic Growth In 2025” was originally published on Connect CRE.
