If you felt a strong sense of déjà vu at the beginning of 2015, you're not alone.
Much like in 2014, a multitude of factors, including record snowfall across the country and the West Coast port strike,
Economic growth in 2015 is expected to reach 2.8% despite the slow start, Fannie Mae's Economic and Strategic Research Group said March 23 in its forecast for the month. Home sales and housing starts are expected to rise to 6% and 15%, respectively, by year-end as well.
"We continue to expect the economy to drag housing upward as we move into the second quarter," said Fannie Mae chief economist Doug Duncan in the forecast's news release. "The economy is getting a boost from the strong employment numbers we've seen last year and at the start of 2015. When this employment growth partners with income growth and consumers experience a rise in their personal household income, we should see a similar boost in the housing sector."
The past year was the best since 2000 in terms of job creation with 3.3 million new jobs added.
Additionally, while consumer spending scaled back from the annualized pace of 4.2% in the fourth quarter of 2014, savings surged higher as consumers took the extra cash from falling oil prices to the bank. The saving rate in January was 5.5%, a percentage point higher than two months before.
Still, the Fannie Mae economist noted certain factors could temper the growth they predicted to come throughout 2015. Economic growth has slowed globally, for starters. Closer to home, markets have become more volatile as investors begin to anticipate Federal Reserve changes to the target fed funds rate.
