WASHINGTON, DC – Full-year real GDP growth is estimated to come in at 2.2 percent in 2019, unchanged from the prior forecast but down markedly from 2018’s 3.1 percent, according to the Fannie Mae Economic and Strategic Research (ESR) Group’s March outlook. The expected deceleration in growth is largely attributable to the fading fiscal impact from the Tax Cuts and Jobs Act, as well as continued sluggishness in business investment and consumer spending. Economic growth in the first quarter of 2019 is forecasted to slow to 1.3 percent in part due to consumer caution following significant volatility in households’ financial assets in the fourth quarter. The ESR Group also noted that risks to its forecast exist primarily on the downside, including slower global growth and ongoing U.S.-China trade uncertainty, but that sustained improvement in productivity and the central bank policy response to fourth quarter volatility will play an important role in shaping the full growth picture.
The ESR Group also continues to expect home sales to stabilize in 2019, with housing demand supported by a solid labor market and strong household formation. Affordability, too, has improved by slowing house price appreciation and more attractive mortgage rates. Purchase mortgage originations are expected to expand in 2019 while refinancings contract.…continue reading the rest of this post: Home Sales Are Expected to Stabilize as Affordability Improves, Fannie Mae Reports