The MReport Webcast: Tuesday 6/21/2016

While housing activity and consumer spending in Q2 picked up, a slowdown in hiring and business investment has tempered what should have been a rosy forecast from Fannie Mae. The agency’s latest full-year economic growth forecast, however, remains unchanged in June from the prior forecast of 1 point 7 percent. Fannie Mae’s findings about slower hiring follows the Bureau of Labor Statistics’ most recent report that the labor force participation rate in May fell by 20 basis points, down to 62 point 6 percent.

Fannie Mae Chief Economist Doug Duncan noted that housing activity is gaining strength heading into the summer, but recent pullbacks in construction hiring, likely due to a shortage of skilled workers, could weigh on the outlook for the sector. Duncan said, quote, With little improvement in the current housing supply picture so far, we expect only moderate housing expansion this year. Close quote

It appears GSE reform may actually be on the horizon—or at least discussed regularly in Washington—thanks to a new bill proposed by Congressman French Hill of Arkansas recently. The bill, called the GSE Review and Reform Act, would require the U.S Treasury Secretary to study the Federal Housing Finance Agency’s conservatorship of Fannie Mae and Freddie Mac annually, as well as the impact ending that conservatorship might have. The bill would also require the Treasury to present recommendations to Congress each year on how to progress GSE reform and move toward ending the conservatorship.