Mortgage Industry News
« Return to Mortgage Industry News
Fannie Says Q2 Will be Tough, but Housing, Healthcare Should Bolster Recovery
Friday, May 15, 2020
Fannie Mae's Economic and Strategic Research (ESR) group says it expects the
U.S. gross domestic product (GDP) to decline by 35 percent (annualized) in the
current quarter. The loss of 4.8 percent in the first quarter, the largest
decrease in six years exceeded Fannie Mae's estimate of -3.3 percent because of
a larger than anticipated slowdown in personal consumption expenditures (PCE), 40
percent of which, ironically, came from a decline in spending on healthcare
because of delays or cancellations in elective surgeries because of the pandemic. The plummeting growth expected in the second quarter will improve in the
second half of the year, with healthcare at that point providing outsized
support. As restrictions and social distancing measures are relaxed, the
economists believe that an elevated savings rate, supportive monetary and
fiscal policies, and pent-up demand will start to drive the economic recovery.
Full-year 2020 GDP is expected to contract 5.3 percent, while 2021 growth is
forecast to be at 5.2 percent.
Read Full Article