The economy is expected to grow at a full-bodied pace for the year, and boosted further by the stimulus, according to Fannie Mae’s Economic & Strategic Research (ESR) Group’s recently released Economic and Housing Outlook for March 2018. Analysts at Fannie forecast GDP growth at 2.8 percent, barring consumers reining in their spending, the impact of the aluminum/steel tariffs and other influencers.
“Home sales got off to a rough start in 2018, bottle-necked by the persistent challenges of the inventory shortage,” says Doug Duncan, chief economist at Fannie Mae. “Of course, there’s a flipside to the demand-supply imbalance, and strong home price appreciation continues to come as welcome news to existing homeowners.”
According to the National Association of REALTORS® (NAR), in the first two months of 2018, existing– and pending home sales struggled. Compounding the issue, potentially, are hiked interest rates; the ESR Group is all but certain the Federal Reserve will move on rates at its quarterly meeting on Wednesday.
“We’re nearly a quarter of the way through 2018, and, as anticipated, the interplay between fiscal and monetary policy continues to frame the economic landscape,” Duncan says. “While we expect the economy to shift temporarily into a lower gear in the first quarter, the pace of growth should accelerate through the remainder of this year and into the next.
“Beyond the obvious downside risks, the economy appears poised to build on a foundation of strong consumer spending and a historically healthy labor market following the recent passage of the discretionary spending bill, on top of tax reform,” says Duncan.