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Last updated on September 23rd, 2021 at 10:42 am
Due to continuous supply chain disruptions and labor market burden, Fannie Mae’s Economic and Strategic Research (ESR) Group has lowered its 2021 real GDP growth forecast from 6.3 % to 5.4%.
Fannie Mae said that the balance of the previously projected second-half growth might happen in 2022 and they upgraded their forecast to 3.8% from 3.2%.
Fannie Mae chief economist Doug Duncan said that the supply chain and labor market constraint holds back the economic growth, both of which are expected to do well come 2022.
He added that even if the peak of the recent surge is over-inflation would remain raised the next year as well.
The Consumer Price Index is expected to be at an annualized pace of 5.4% this year-end and to stay above 5% until the second quarter of 2022 predicts the ESR Group.
Fannie Mae said the limitations in supply are also disrupting the housing market. Because of which they lowered their fourth-quarter new home sales forecast to 789,000 units from 846,000 units.
The forecast for purchase mortgage originations forecast was amended for 2021 and anticipating a 6.3% increase in 2022.
Meanwhile, of the total mortgage origination activity in 2022, the refinance origination volumes are projected to fall to 40% from a 58% share.
Reference Source: MPA
