The chatter of an impending recession continues and the latest warning says it could happen this year.
In a press release On Friday, government-sponsored mortgage brokerage firm Fannie Mae warned that a “modest dissolution” is “expected” in the second half of 2023, according to the agency’s Economic and Strategic Research Group.
Fannie Mae noted that unsustainable consumer spending and a slowing housing market are the likely culprits predicting an impending recession.
As home sales have slowed over the past year, the bureau predicts continued declines throughout the year due to tight inventory and a lack of affordability.
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Despite the current housing market being one of the main indicators of an impending recession, the sector has proved relatively resilient and could also be the driving force behind the country’s economic growth. Exit out of a recession.
“Housing remains the number one evidence of why we expect the recession to be modest,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in the release. “It continues to exceed our expectations, and we expect its relative strength to re-energize the economy to return to growth in 2024.”
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