Fannie Mae has downgraded its 2021 real gross domestic product forecast citing the Delta variant of COVID-19 and persistently strained supply chains but has upgraded its outlook for 2022.
The GSE dropped its 2021 fourth quarter year over year projection to 6.3% from 7% while raising its expectations for a 2022 growth rate to 3.2% from 2.8%. Because of lower-than-expected outlooks for interest rates, the forecast for home loan originations in 2021 rose to $4.4 trillion from $4.2 trillion with the bulk of the increase from refinancing. Its forecast of 2022 originations ticked upward to $3.3 trillion from a prior $3.2 trillion.
Future growth for GDP, asserted the mortgage lender, is heavily dependent on a combination of businesses rebuilding depleted inventories and consumer spending continuing to shift away from goods and into services.
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