The housing sector will contribute to gross domestic product for the first time in seven years, according to a report released today by Fannie Mae’s economic and strategic research group.
The economy grew 2.8 percent in the fourth quarter of 2011 and is expected to grow at an overall rate of 2.3 percent this year, up from 1.6 percent for 2011 as a whole, the report says.
The report, which predicts economic growth for the coming year, said gains in the housing sector would be modest, and that a further decline in median sale prices for homes is still expected. However, the labor market continued to improve, with non-farm payroll jobs increasing by nearly 250,000 in January across many industries, including construction.
“The economy appears to be more resilient than in previous months, and should be less vulnerable to shocks, including any spillover from the European sovereign debt crisis,” said Doug Duncan, Fannie Mae’s chief economist. “Economic growth will remain constrained by various headwinds, such as a potential spike in oil prices due to tension in the Middle East.” — Guelda Voien