October Research’s Elizabeth Childers, editor of RESPA News, a sister publication of The Legal Description, hosted the webinar “2024 Economic Forecast Series” featuring Doug Duncan, senior vice president and former chief economist at Fannie Mae. Duncan has been responsible for forecasts and analyses of the economy and the housing and mortgage markets. In this webinar, Duncan provided a look into the latest trends and projections for the housing market.
Duncan began his talk by addressing the current state of the economy.
“The economy is still growing at a healthy pace,” he said. “We actually had forecasted at the beginning of 2023 a mild recession with the economy largely being supported by the bottom in housing.”
He went on to explain the recession didn’t occur as projected.
“The goods part of the economy — the part that produces things — did actually go through what I would call a mild recession. But the service side — which is where people go to restaurants and sporting events … held up very strongly. And so, overall, the economy, while it slowed, it did not have a recession and both parts have rebounded.”
Duncan considered the question of whether the Fed would be able to achieve a soft landing.
“My personal view is that the term is misleading because change is constant in the economy. And so if there is a temporary pause in either the growth or the decline in the economy, that might be called a soft landing.”
Duncan posited the term implies a “sustained, noninflationary growth,” which may not be attainable as the economy is in a state of constant change because “it changes by the moment with the millions of decisions that are made by people and businesses.”
Over the course of the talk, Duncan covered:
- Trends in the labor market and unemployment.
- Consumer dissatisfaction with the Fed’s response.
- The federal government’s fiscal policy deficits.
- Interest and mortgage rate projections.
- Potential impact of climate on home values regionally.
- Role of immigration on supply and demand for housing.
- Underwriting criteria stability.
- Current forecast for home sales.
To learn more about the current forecast, the webinar can be found here.