While fiscal headwinds have held back economic growth for the first half of 2013, ""Fannie Mae's"":http://www.fanniemae.com/portal/index.html Economic & Strategic Research Group maintains in its newest Economic and Housing Outlook that the recovery should pick up the pace as it heads into the year's second half.[IMAGE]
Based on data for Q1 and predicted numbers for Q2, Fannie Mae expects gross domestic product (GDP) to grow at an average 1.8 percent for the first half of the year (2.4 percent growth for the first quarter and 1.2 percent for the second). As fiscal drags wane, however, growth ""should [COLUMN_BREAK]
continue to move in the positive direction amid an ongoing recovery in housing, rising household wealth, and expanded energy production.""
""At the outset of the year, ""we forecasted"":http://www.themreport.com/articles/fannie-mae-slow-pace-of-recovery-new-normal-2013-01-24 that 2013 would witness sustainable but below-par growth as the economy begins its transition to more normal levels. Halfway through the year, our view is little changed,"" said Doug Duncan, chief economist for Fannie Mae. ""We expect approximately 2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012. This is consistent with the incremental improvement seen over the past few years but still below the economy's potential.""
GDP growth is expected to push past 2.5 percent in 2014, ""boosted largely by tailwinds from the strengthening housing market,"" Duncan added.
As far as housing goes, recent indicators (such as home prices, home sales, and homebuilding activity) show signs of a long-term improvement toward normal levels, Fannie Mae said. In addition, while rising mortgage rates have impacted originations, ""affordability conditions remain high and [rates] should not present a significant obstacle to potential homebuyers.""