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Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) Positive On Economic Growth

As per Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA)’s ESR Group, the economy is on the brink of strong growth in 2015. The improving employment sector, declining commodity prices, and rising income will boost full-year economic growth. Strong income growth will lead to robust housing recovery.

The details

Federal National’s ESR group stated that the labor market is showing consistent signs of growth. It will lift consumer confidence, which in turn will help to boost manufacturing activity, consumer spending and the speed of the housing recovery. The only problem can be a strong U.S> currency that weighs on the trade deficit. The economy is expected to rise to 2.9% in 2015, up from 2.5% growth in 2014.

The highlights

Doug Duncan, of Federal National, said that the report indicates economic growth to be at 2.9% this year. It is slightly lower than the previous forecast, still supports the solid improvement compared to 2014. The nation’s aggregate income has benefited from growing labor market, which together with lower commodity prices will result in higher auto sales and increased consumer spending in 2015.

The future ahead

Duncan further said that Federal National expects housing to witness strong recovery in 2015 after the dismal and ultimately disappointing performance last year. The forecast calls for several factors; including income growth, ease in lending standards, stabilized housing affordability, strong hiring, and others. All these factors will result in an improving housing demand throughout 2015.

Interest rates

Federal National expects that the Federal Reserve will hike short-term interest rates in mid-2015. However, geopolitical issues and weak global economic growth will limit the hike in long-term interest rates. The total homes sales are expected to increase by almost 6.0% in 2015. The single-family mortgage can surge to $1.2 trillion. The company expects single-family mortgage outstanding debt to be flat in 2015.

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