Forecasters See Surprisingly Strong Housing Rebound, But There Are Risks

The reopening of the economy in several states from the COVID-19 shutdowns has moved Fannie Mae’s Economic and Strategic Research (ESR) Group to raise its estimate for the 2020 full year GDP from the 5.4 percent decline it predicted in June to a 4.2 percent downturn. The economists say this improvement is almost entirely due to a stronger pace of recovery than they had anticipated. They caution that the current surge of cases in many areas will drag on growth in the future, however, they expect any future shutdowns and behavioral changes will be less severe than in the first round. Furthermore, given that consumer spending is still down, future behavioral responses will likely translate into only a drag on growth rather than a sharp decline, as occurred in the early spring. They also revised

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