According to the Fannie Mae Economic and Strategic Research (ESR) Group, recent data on GDP, the labor market, and inflation indicate that the economy is starting off 2025 with strong momentum. While their forecast for year-end GDP remains at 2.2%, they have revised their expectations for inflation upwards to 2.8% on a year-over-year basis from its previous estimate of 2.5%.
Kim Betancourt, VP of multifamily economics and strategic research at Fannie Mae stated that “economic growth was robust in the beginning of this year due to higher than expected personal consumption in the fourth quarter.” However, she also noted that consumer spending may slow down as it aligns with historical patterns relative to income levels. Additionally, uncertainty surrounding trade policies poses a risk factor for both GDP and inflation forecasts.
The ESR Group has adjusted its projections for mortgage rates as well; now anticipating them to reach 6.6% by end of this year and remain steady at around 6.% into next year – an increase from their previous outlook.
Pictured above is Fannie Mae’s headquarters.
Focusing specifically on economic indicators such as GDP growth rate , labor market conditions ,and inflation trends,the latest report from Fannie Mae’s Economic & Strategic Research Group suggests a strong start for US economy in early months of fiscal calendar-2025.However,GDP projection stands unchanged @ ~$22 trillion.The group has raised CPI estimates though,to ~3%,from earlier prediction @~$25 billion.
VP-multifamily economics & strategic research,Kim Betancourt,is quoted saying,”Consumer spending showed remarkable resilience during Q4’24,pushing up our initial estimates”.She further added,”Going forward we expect some slowdown owing primarily towards consumers’ ability-to-spend vis-a-vis income levels.Having said so,she cautioned about ongoing ambiguity over trade policy which could potentially derail current positive momentum.
The group has also revised its mortgage rate forecast for 2025 & 2026,with projections now standing @ ~6.6% & ~6.5%,respectively;slightly higher than earlier estimates.
Pictured here is Fannie Mae’s headquarters in Washington D.C.,a symbol of the organization’s commitment towards providing stability to US housing market through innovative solutions and policies.
