MEDIA RELEASE PR39185
Housing Recovery Dependent on Inventory Reduction According to Fannie Mae's Economic
& Mortgage Market Analysis Group
WASHINGTON, Apr. 19 /PRNewswire-AsiaNet/ --
Employment Looks Promising, but It's Still Early in the Game
Housing is stabilizing but excess inventory and shadow supply are hindering
recovery according to the April 2010 Economic Outlook released today by Fannie Mae's
(NYSE: FNM) Economics & Mortgage Market Analysis Group. The outlook projects economic
growth of 3.1 percent for all of 2010, notwithstanding the recent dip in growth for
the first quarter.
"Financial conditions are improving as seen by the unwinding of various programs,
most notably the MBS purchase program which ended in March. This is strong evidence
that the Fed believes the financial sector can stand on its own," said Fannie Mae
Chief Economist Doug Duncan. "We estimate that June 2009 was the end of the
recession, a good sign that we're moving forward. Nevertheless, significant
improvements in the labor market and consumer spending will be the big hurdles as we
move toward recovery in the housing market and broader economy."
New home sales are at record lows and will be slow to recover until inventory of
existing homes and the foreclosure overhang are worked off. However, we see key
indicators for existing home sales, including pending home sales and purchase
applications, are showing good signs of a pickup.
Jobs, a driving force for housing, are now moving in the right direction.
Fundamentals of the labor market appear to be improving as layoffs have slowed and
hiring is showing signs of life. March payroll employment increased by 162,000, the
largest gain in three years; temp employment posted a sixth consecutive monthly gain;
and the average workweek increased. On the downside, unemployment will remain
elevated for some time, despite the peak unemployment rate of 10.1 percent likely
having occurred in October 2009.
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 April
2010 Economic Outlook, visit the Economics & Mortgage Market Analysis
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,
Fannie Mae,
+1-202-752-2034;
Resource Center:
+1-800-732-6643
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