WASHINGTON, June 20, 2011 /PRNewswire/ --
- Home Prices Continue to Decline
Prospects for accelerating growth have grown dimmer recently due to downward revisions of first-quarter economic activity and slowdowns across a broad set of indicators during May, according to the June 2011 Economic Outlook released today by Fannie Mae's (OTC Bulletin Board: FNMA) Economics & Mortgage Market Analysis Group. Weakness in economic activities spanning manufacturing, consumer spending, jobs, and housing has resulted in the group downgrading projected growth for the current quarter, as well as for the second half of they year. For 2011, economic growth is expected to come in at 2.5 percent, down from 2.9 percent in the previous forecast and more than a full percentage point lower than the forecast at the beginning of the year.
Elevated inventories continue to put downward pressure on home prices, continuing the trend that started at the end of the homebuyer tax credit last summer. The group forecasts that we still have not seen the bottom for home prices, expecting additional home price declines through the third quarter before flattening out at the end of 2011.
"Ultimately, the labor market holds the key to a housing recovery, but job growth is needed in order to activate housing demand," said Fannie Mae Chief Economist Doug Duncan. "Hiring delays will continue to push out timing for the housing rebound."
For an audio synopsis of the June 2011 Economic Outlook, listen to the podcast on the Economics & Mortgage Market Analysis site at http://www.fanniemae.com. Visit the site to read the full June 2011 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, and Housing Forecast.
Also available via link from the Economic Developments Commentary is the Multifamily Market Commentary by Kim Betancourt, Director, Multifamily Economics and Market Research. The Commentary provides information on new construction data for the multifamily and condo sector.
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economics & Mortgage Market Analysis (EMMA) 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 EMMA 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 EMMA 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.
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.
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SOURCE Fannie Mae