Fannie Mae Upbeat on Housing, Economy in 2nd Half from Les and Elaine

Elaine Golden Gealer, Brentwood condos, Brentwood townhomes, Brentwood real estate, Brentwood new construction, Brentwood condominiums, Westwood condos, Westwood townhomes, Westwood real estate, Westwood new construction, Westwood condominiums, Westchester condos, Westchester townhomes, Westchester real estate, Westchester construction, Westchester condominiums, Toluca Lake condos, Toluca Lake townhomes, Toluca Lake real estate, Toluca Lake construction, Toluca Lake condominiums, North Hollywood condos, North Hollywood townhomes, North Hollywood real estate, North Hollywood new construction, North Hollywood condominiums, Sherman Oaks condos, Sherman Oaks townhomes, Sherman Oaks real estate, Sherman Oaks new construction, Sherman Oaks condominiums, Encino condos, Encino townhomes, Encino real estate, Encino new construction, Encino condominiums, Beverly Hills condos, Beverly Hills townhomes, Beverly Hills real estate, Beverly Hills new construction, Beverly Hills condominiums, West Los Angeles condos, West Los Angeles townhomes, West Los Angeles real estate, West Los Angeles new construction, West Los Angeles condominiums, West Hollywood condos, West Hollywood townhomes, West Hollywood real estate, West Hollywood new construction, West Hollywood condominiums, Santa Monica condos, Santa Monica townhomes, Santa Monica, real estate, Santa Monica new construction, Santa Monica condominiums, San Fernando Valley condos, San Fernando Valley townhomes, San Fernando Valley real estate, San Fernando Valley new construction, San Fernando Valley condominiums.Despite improved consumer spending and stronger residential and non-residential investments Fannie Mae’s Economic and Strategic Research team are holding to their earlier forecasts for the second half of 2015.  In their current monthly report they estimate that economic growth at an annualized 2.8 percent in the second quarter, up 0.4 percent from what they projected in June, with an acceleration during the second half to about 3.0 percent.  They were, they said, already ahead of the game, having upgraded their full year estimate of growth from 1.9 percent to 2.0 percent in June, based on earlier revisions to the GDP.

Consumer spending is expected to be the biggest driver of growth for the rest of the year.  It is showing signs of a turnaround accelerating to an estimated 2.9 percent in the second quarter from 2.1 percent in the first and was at an annualized 4.2 percent over the three months ending in May.  Housing and government spending will also be a major contributors to growth while net exports will be a drag as will the decline in oil prices over the last year. The debt crisis in Greece still poses a downside risk to the overall forecast as does a deteriorating economic picture in China.



Personal income followed a 0.4 percent gain in April with another 0.2 percent in May and the Consumer Confidence Index jumped 6.8 points from May to June, the second highest reading (tied with March) in the expansion.  Adding a bit of frosting, household net worth had its best showing since the third quarter of 2007 and the nation is on track to add 2.5 million jobs this year – less than last year, but still what Fannie Mae calls a “solid” number.

On the housing-related front, residential construction employment dropped precipitously in May but Fannie Mae said it expects home building activity and residential construction employment to pick up along with housing demand.  One concern is that builders may find it increasingly difficult to hire skilled workers without substantially raising wages.  Wage gains in that sector have picked up after a sharp slowdown last year.  This is in contrast to the overall wage growth, which has been moving sideways at approximately 2.0 percent over the past three years.




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