The bolstering national housing market, coupled with increasing consumer confidence, steady mortgage records and rising demand in both residential sectors and retail markets led to the reporting of a significant amount of economic growth during the first three months of 2013.
Fannie Mae's Economic & Strategic Research Group recently announced gains were seen an accelerated pace of 3.2 percent during the first quarter of this year, and detailed estimations for the following months. Officials of the government-sponsored enterprise noted the rapid improvement is most likely unsustainable, as the conclusion of a one-time boost provided by business inventories is expected to see a return of balanced levels in subsequent quarters. Overall, economists are projecting less growth in coming months, but suggesting a total of 2.3 percent will be exhibited by year's end. Even though less growth may be seen, the annual estimation is higher than the 1.7 percent of gains exhibited in 2012 and the 2 percent recorded in 2011.
Fannie Mae chief economist Doug Duncan outlined the organization's projections, saying substantial improvement may be seen - but countered by domestic and international financial fluctuations.
"The April forecast reflects the growing realization that 2013 is off to a good start from a GDP perspective, but we expect the stronger-than-expected first quarter pace to slow somewhat in the second quarter," said Duncan. "On the downside, tax hikes, sequestration, and the euro-zone crisis still pose significant risks to our forecast, and the fiscal tightening will likely affect consumer spending and other economic activity in coming months. However, the housing recovery continues to broaden and may be more robust than we anticipate, helping to offset fiscal headwinds."
Home sales, prices logged at amounts above year-ago levels
The estimations announced by Fannie Mae may be realized, since the last three months saw so much improvement in the national housing market. According to Re/Max's March National Housing Report, public property records saw median prices across American appreciate more than 8 percent, while sales ticked up nearly 3 percent. Falling inventory levels was cited as a possible cause for the recent figures, as falling supply and growing demand can hinder sale numbers and drive prices up significantly.
The inventory supply for March was reportedly noted at 3.8 months, marking a level almost 30 percent lower than that recorded during March 2012. Organization officials offered their expectations for the coming months, saying housing prices may remain at high levels well into the summer season - as consumers are regain financial footing and consider homeownership.