A report by the Fannie Mae Economic and Strategic Research (ESR) Group points to a positive outlook for the housing market. Healthy labor markets and a continued stream of consumer spending, which both show no signs of slowing, contributed to this positive prediction of full-year 2020 real GDP growth forecasts.
Also good news, factors relating to the housing market within the report were predicted to strengthen considerably in the future in particular. Among these improvements are an expected rise in residential fixed investment, a boom that will be fueled by a rise in starts and sales for new single-family housing.
The ESR Group predicts in their report a headline growth of 1.8% for Q4 2019. As for 2020’s full-year growth, that is predicted to fall at 2.1%. Both predictions arrive at an impressive two-tenths higher than previous predictions, which says a lot about the strong economic data.
As the healthy labor market has directly fueled the health of consumer spending, the report predicts that this continued consumer buying will likewise provide a boost in business fixed investment in the quarter, and continued into 2020.
For the most part, factors of GDP remained stable with no significant change or fluctuation this month, but one factor, that of residential fixed investment, experienced more noticeable change. Specifically, it grew substantially. Owing to this sign of economic health, and also indications from the FOMC that it is not likely to lower rates anytime soon, the report now officially took the stance that it predicts no big moves from the federal government within the next year whatsoever.
The report is also the declaration that housing construction is expected to drive economic growth, with the ESR Group predicting that more homes will be built as the economy and consumer spending continue to stay healthy and strong. Supportive interest rates will also aid in homebuilders and homeowners making the move to construct new abodes.
Fannie Mae SVP and Chief Economist Doug Duncan’s summarized the data as he said, “Housing appears poised to take a leading role in real GDP growth over the forecast horizon for the first time in years, further bolstering our modest-but-solid growth forecasts through 2021.”