MEDIA RELEASE PR38777
Drop in Home Sales Underscores Fragile Recovery According to Fannie Mae's Economic &
Mortgage Market Analysis Group
WASHINGTON, Mar. 17 /PRNewswire-AsiaNet/ --
Consumer Spending Shows Promise Despite Low Levels of Consumer Confidence
Housing activity is expected to rebound later this year but at a slower pace than
previously projected according to the March 2010 Economic Outlook released today by
Fannie Mae's (NYSE: FNM) Economics & Mortgage Market Analysis Group. A surprising
drop in new and existing home sales disappointed, but the setback is viewed as
temporary with gains expected in the second quarter then trending up on a sustainable
basis by year end. The outlook continues to call for moderate economic growth of 3.0
percent for 2010, as the labor market appears poised to create jobs, the service
sector shows improvement, and consumer spending joins in as part of the economic
storyline. Consumer spending grew a solid 0.3 percent in January, suggesting a pickup
in the first quarter despite the possibility of a slow down in February.
"The recent growth in consumer spending is a positive sign for first quarter
gains. However, anxiety over job and income prospects continues to weigh on consumer
confidence which will likely lead to moderate spending growth in the coming
quarters," said Fannie Mae Chief Economist Doug Duncan. "Strengthening growth in the
service sector and more favorable financial conditions overall keep us optimistic
that we are moving forward with the recovery, albeit at a lower trajectory than
previously forecast."
The Economic Outlook includes the Economic Developments commentary, Economic
Forecast, and Housing Forecast -- which detail movement of interest rates, the
housing market, the mortgage market, and the overall economic climate. To read the
full March 2010 Economic Outlook, visit the Economics & Mortgage Market Analysis site
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's
Economics & Mortgage Market Analysis (EMMA) group included in these materials should
not be construed as indicating Fannie Mae's business prospects or expected results,
are based on a number of assumptions, and are subject to change without notice.
Although the EMMA group bases its opinions, analyses, estimates, forecasts, and other
views on information it considers reliable, it does not guarantee that the
information provided in these materials is accurate, current, or suitable for any
particular purpose. Changes in the assumptions or the information underlying these
views could produce materially different results. The analyses, opinions, estimates,
forecasts, and other views published by the EMMA group represent the views of that
group as of the date indicated and do not necessarily represent the views of Fannie
Mae or its management.
Fannie Mae exists to expand affordable housing and bring global capital to local
communities in order to serve the U.S. housing market. Fannie Mae has a federal
charter and operates in America's secondary mortgage market to enhance the liquidity
of the mortgage market by providing funds to mortgage bankers and other lenders so
that they may lend to home buyers. Our job is to help those who house America.
SOURCE: Fannie Mae
CONTACT: Pete Bakel of Fannie Mae,
+1-202-752-2034
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