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Fannie Mae: “Modest Recession” in the Forecast for 2023

Tightening monetary policy and elevated inflation remain the primary causes of a stagnating economy despite strong job growth, Fannie Mae’s Economic and Strategic Research (ESR) Group said Monday. The ESR Group’s latest forecast of real gross domestic product (GDP) growth for full-year 2022 and 2023 remained essentially flat compared to last month at 0.0% and negative 0.4%, respectively.  

The ESR Group expects total home sales to decrease 16.2% in 2022. This decline represents a further downward revision from last month’s forecast. 

“The economy is progressing largely as we’d previously forecast,” said Doug Duncan, Fannie Mae chief economist. Although lower gas prices and lower interest rates will support “modest economic growth” in 2022’s second half, “we maintain the view that a modest recession is likely to emerge in the new year as the labor market softens and the effects of tighter monetary policy are more acutely felt.” 

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Fannie Mae ESR Group

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

  • ◦Financing
  • ◦Economy
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