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Housing expected to be positive for U.S. economy

Posted on Wednesday, January 22, 2014 at 9:24:19 AM

The housing market is expected to be a positive factor for the U.S. economy in 2014, in addition to private sector spending and reduced government policies, according to a recent forecast by Fannie Mae's Economic & Strategic Research Group.

Fannie Mae chief economist Doug Duncan explained in a statement that housing market improvement is one of several key growth drivers expected in the new year. He added that even though residential financing rates have ticked up, consumer sentiment toward the segment continues to get stronger.

Overall, consumer and business spending growth is predicted to increase to 2.9 percent in 2014 compared to 2.6 percent in 2013, Fannie Mae reported.

In addition to these positive forecasts, home sales could also surge this year, even though 2013 ended on a slightly weaker note than some had hoped. Paul Diggle, property economist at Capital Economics, explained in a report that slower existing-home sales is only a temporary problem in the U.S., HousingWire reported. 

"The bottom line is that the improvement in housing market activity during 2014 will be considerably weaker than the improvement during 2013 - even taking account of the soft end to last year," Diggle wrote, according to the news source. "But we do at least expect a further improvement in activity."