Fannie Mae’s Updated Forecast for 2023: Recession with a Likelihood of Rebound

The Economic and Strategic Research (ESR) Group at Fannie Mae released its report for 2023 and beyond, highlighting the Q3 2022 strength in net exports along with expected declines in residential fixed and business investment. The report concludes that the lock-in effect, homeowners’ reluctance to sell or move while mortgage interest rates are high, continues to chill the home sales outlook for early 2023. They anticipate either an economic slowdown or recession to be mild and brief and consider the end of Q2 2023 the likely bottom of the trough.

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