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Forecasters See Surprisingly Strong Housing Rebound, But There Are Risks
Tuesday, July 14, 2020
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.
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