Economic growth expectations remain the same despite the rate hike the Federal Reserve is expected to announce, Fannie Mae said Wednesday.
Fannie Mae continues to project 2% economic growth for 2017, the same as a month ago. Additionally, Fannie noted it expects that today's rate increase will be followed by two other hikes in the second half of the year.
Fannie's housing-specific forecasts similarly held steady. The government-sponsored enterprise anticipates single-family mortgage originations to now total $1.567 trillion in 2017, up slightly from the projection of $1.565 trillion last month.
"Our economic forecast remains in a conservative holding pattern as we await word on the particulars of the new administration's plans for fiscal stimulus," Fannie Mae Chief Economist Doug Duncan said in a news release.
Despite the holding pattern, Fannie does recognize that sentiment has taken a determined turn for the better in recent months.
"In the meantime, economic sentiment from most industry stakeholders continues to reach new heights: consumers, as demonstrated by our National Housing Survey, are more positive than at any time since the survey's inception in 2010 about the direction of the economy, while homebuilders' optimism remains near an 11-year high," Duncan said.
But headwinds remain: Duncan noted that while tight housing inventory has driven up home prices (and consequently many Americans' personal wealth), it also continues to constrain access for first-time homebuyers.
