The economy has started the year on an upbeat note and it’s expected to continue to stay strong in 2015, led by a strengthening employment sector and rising income growth, according to Fannie Mae’s Economic & Strategic Research Group. That is all expected to translate into a drive in consumer spending and lift the pace of the housing recovery, Fannie Mae researchers note.
The economy is predicted to see a 2.9 percent growth this year, up from a 2.5 percent growth in 2014, according to Fannie Mae’s economic report.
"We expect housing to shift up a gear in 2015 following the uneven and ultimately disappointing activity last year," says Doug Duncan, Fannie Mae’s chief economist. "Our forecast calls for a number of factors, including strong hiring and income growth, stabilized housing affordability, and modestly easing lending standards, to translate into improving housing demand throughout the year.”
Fannie Mae economists are predicting home sales to rise by about 6 percent for 2015, and total single-family mortgage production soaring to about $1.2 trillion.
The housing market will benefit as consumers get more upbeat about the economy and increase their spending, Duncan notes.
"Although we are beginning this year at a more modest pace compared to the above-trend numbers seen at mid-year 2014, the country’s aggregate income has benefitted from the improving labor market, which, combined with low gasoline prices, should help drive higher auto sales and overall consumer spending throughout 2015,” Duncan notes.