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Forecast: Economic Growth to Help Housing in 2015

crystal-ballWith only weeks left before 2014 comes to a close, many economic commentators are already looking to what next year could bring—including Frank Nothaft and Len Kiefer, chief economist and deputy chief economist at Freddie Mac [1].

In the company's latest Economic and Housing Market Outlook [2] for the United States, the two analysts turn their attention away from 2014—a mixed year for housing, especially compared to 2013—and toward 2015, which they say will see continued strengthening in the market for home purchase mortgages as the economy improves on a broad basis.

Looking at the larger economic picture, the economists predict a 3 percent growth rate for gross domestic product (GDP) in 2015, which would mark only the second year in the past decade in which growth was at 3 percent or higher.

Also among the pair's predictions for 2015:

Nothaft pointed to several promising signs in the forecast: "Government fiscal drag has turned into fiscal stimulus, lower energy costs support consumer spending and business investment, further easing of credit conditions for business and real estate lending support commerce and development, and more upbeat consumer and business confidence, all of which portend faster economic growth in 2015.

"And with that, the economy will produce more and better paying jobs, providing the financial wherewithal to support household formations and housing activity," he continued.