Top 10 Takeaways from Fannie Mae Chief Economist

Every year, we have the privilege of hosting our longtime friend, Dr. Doug Duncan, Chief Economist of Fannie Mae and one of the most accurate forecasters, to give his economic forecast for the year. While the markets have been volatile recently and many economists say we're headed towards a recession, our friend Doug thinks differently. Here are some of our top takeaways:

1) The housing market peaked in 2017 and has plateaued since. He does not expect to see a housing crash.

2) In fact, Doug does not see a downturn in the next 2 years (with trade wars and 2020 elections being potential disruptors to this prediction), although growth slowing.

3) We will be in the longest post WWII expansion as of July. However, this does not guarantee a market correction (look at Australia going 25 years without a recession).

4) We have risky outstanding business debt at $5T.

5) Both short term and long term interest rate trends are flat to down. (Do you have any updated comments since the 10-year treasury dropped to 2.055% last week?)

6) The homeownership rate has turned the bottom corner and is slowly moving back up. Millennials are now starting to form late households.

7) There will be continued downward trends in commercial cap rates.

8) Mortgage delinquency rates are very low for both residential and commercial borrowers.

9) We still have a shortage of housing starts.

10) In spite of our Fed debt and unbalanced budget, we are still one of the strongest economies in the world. 

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