Fannie Mae Foresees Market Volatility in Coming Months

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The uncertainty of another government shutdown and high unemployment are the major causes for the shifts in the housing market. For a more detailed look at this subject – please read the article below.

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In the aftermath of the federal government shutdown and contentious debt ceiling negotiations, Fannie Mae predicts “continued market volatility” for at least the next few months.

Consumer sentiment toward the economy and the housing market wavered last month, according to Fannie Mae’s November Economic Outlook.

Looking forward, “[s]ince many remaining policy decisions will spill over into the beginning of next year, it seems likely that both consumers and businesses will continue to pull back in the interim, leading to increased volatility in the markets,” said Doug Duncan, chief economist at Fannie Mae.

The markets await a final budget, a decision regarding the debt ceiling, and the appointment of a new Federal Reserve chair.

Overall, Fannie expects 2013 to end with yearly economic growth around 2 percent and an uptick to 2.5 percent next year.

The housing market contributed 0.4 percentage points to growth domestic product (GDP) in the third quarter, unchanged from the second quarter, according to Fannie Mae.

Existing home sales declined in September, as did pending home sales, which signal more declines in the next couple months.

Single-family home starts “have disappointed” this year, according to Fannie Mae. In fact, they began to decline before interest rates began rising.

To read the complete article – please use the link below.

Market Volatility

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