Sunday, February 24, 2013
Housing Continues to Gain Ground.
The economy seems to be transitioning to a slightly stronger growth path according to Fannie Mae's Economic & Strategic Research Group. Increased taxes and reduced government spending will keep growth at a subdued pace in the first half of the year before activity picks up in the second half.
The improving performance of the housing market is expected to continue through 2013. Boosted by strengthening home prices, which may incite more potential buyers to enter the market, housing should contribute to GDP on a growing basis and help to counteract the fiscal headwinds. Other primary growth drivers will include consumer spending, manufacturing, and business capital investment.
Our outlook is bolstered by the employment picture, which is trending better than previously reported, as well as the momentum in manufacturing and energy production. We also expect the housing recovery to broaden this year. However, the degree to which these drivers will serve to offset the headwinds from ongoing and forthcoming fiscal contraction is still to be determined.
