ATLANTIC CITY, N.J. – Opening his presentation by polling the audience on their outlook on taxes, mortgages, healthcare, and more, Doug Duncan, chief economist for Fannie Mae, gave an eye-opening economic forecast for the next four to eight years as we slowly climb out of the recession under the current administration.
“We are probably in the late stages of the economic expansion,” Duncan pointed out, before delving into the declining unemployment rate, the slowing productivity growth, rising corporate profits, and more.
Doug Duncan, chief economist for Fannie Mae, gives an eye-opening economic forecast.
When it comes to mortgage rates, Fannie Mae agrees with the 56% of the audience who said they think rates will be between 4.0-4.5% by December 31, 2017. Duncan explained how intermediate rates have risen substantially since the presidential election after recovering from a dip after Brexit.
Another factor to consider in regards to the housing market, Duncan pointed out, is consumer optimism. Fannie Mae’s Home Purchase Sentiment Index™ (HPSI) suggests slower growth in 2017. For this index, Fannie Mae asks consumers about their feelings regarding buying and selling, their confidence in the market, and their income.
When it comes to the younger generation, Fannie Mae found that the vast majority of renters age 18-44 indicate they do plan to buy at some point in the future, but these millennials, and in some cases their parents, are burdened by student loans as well as diminished job prospects and stagnant wages. However, millennial homeownership is accelerating due in part to job growth during this expansion.
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