10/18/2024 | Press release | Distributed by Public on 10/18/2024 11:20
Helping lenders serve homebuyers and homeowners with affordable mortgages
Financing for quality, affordable rental housing in every market, every day
Reducing risk and enhancing housing finance liquidity
All Resources to Manage Financial Uncertainty
All Resources for Recovering from a Disaster
Recovery Assistance for Homeowners
Recovery Assistance for Renters
Key Takeaways:
The September retail sales report is supportive of our forecast for strong consumption in the third quarter. Control group retail sales, which flow directly into the Bureau of Economic Analysis's estimate of personal consumption expenditures (PCE), have now posted strong increases for five consecutive months. We expect a bit of a slowdown in PCE in the fourth quarter toward something closer to the long-run trend growth rate, though we caution that recent hurricanes may distort the underlying trend in consumption growth over the next few months. Separately, the industrial production report continues to show that manufacturing activity has been roughly stagnant since January of last year. While this is more positive than the manufacturing surveys that have indicated the sector has been in outright contraction over that period, higher interest rates are likely continuing to weigh on growth in manufacturing.
The strong gain in single-family starts was a bit above our expectations, though the typically more indicative series for single-family permits was in line with our forecast. While we expect some short-term volatility in the starts data following the hurricanes in Florida and surrounding states, the underlying trend for single-family construction remains positive. The particularly strong 4-point gain in the homebuilder confidence index for sales in the next six months adds to the bullish case for new home construction. Multifamily starts have been weaker, though, in line with our forecast. With a significant number of multifamily construction projects already underway, we expect multifamily starts will continue to soften through the end of 2024.
Nathaniel Drake
Economic and Strategic Research Group
October 18, 2024
Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.