04/26/2024 | Press release | Distributed by Public on 04/26/2024 12:10
Helping lenders serve homebuyers and homeowners with affordable mortgages
Financing for quality, affordable rental housing in every market, every day
Reducing risk and enhancing housing finance liquidity
All Resources to Manage Financial Uncertainty
All Resources for Recovering from a Disaster
Recovery Assistance for Homeowners
Recovery Assistance for Renters
Key Takeaways:
Real GDP was below consensus and our expectations, but the miss was primarily due to the volatile net exports and inventory investment categories that are less indicative of the underlying growth trend. Real PCE was in line with our forecast and both residential and business fixed investment were somewhat higher than we had expected. So-called "core GDP" grew at a solid 3.1 percent annualized rate, which we believe is more indicative of the actual strength of the economy in Q1. We continue to believe growth is likely to slow this year as consumers return to a more typical saving rate and both businesses and consumers respond to a higher-for-longer interest rate environment.
PCE inflation was above both consensus and our expectations. Core services excluding housing, a closely watched measure of wage pressures, rose at an annualized rate of 4.8 percent. While we continue to see some easing in core price inflation this year in line with our forecast for a generally slowing economy and weaker labor demand, incoming data supports our forecast for a higher-for-longer monetary policy stance.
The rise in pending home sales presents a bit of upside risk to our near-term existing home sales forecast. Still, pending sales recorded in March occurred before rates jumped back above 7 percent, so we continue to expect a small pullback in existing sales in Q2 as the higher rates weigh on demand. On the new sales side, after revisions, the Q1 quarterly sales pace was in line with our forecast. At 8.3, the months' supply is consistent with ongoing use of incentives, which we believe will help new homes sales rise as the year progresses.
Nathaniel Drake
Economic and Strategic Research Group
April 26, 2024
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic and Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.