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2017 Economic Growth Expected to be 2 percent, Fed Official Tells Realtors

Dennis Lockhart of the Federal Reserve speaks to reporters at National Association of Realtors convention in Orlando Friday. (Photo by Ralph Bivins, Realty News Report)

Dennis Lockhart of the Federal Reserve speaks to reporters at National Association of Realtors convention in Orlando Friday. (Photo by Ralph Bivins, Realty News Report)

ORLANDO, Fla. — U.S. economic growth – which is likely be below 2 percent this year because expansion in the first half was weak, only growing at an annual rate of 1.1 percent through June — is expected to be 2 percent next year, a top Fed official said Friday.

“I expect the fourth quarter and 2017 to be consistent with a continuing theme of moderate annual growth of around 2 percent,” Atlanta Federal Reserve President and CEO Dennis Lockhart told members of the National Association of Realtors (NAR) at the organization’s annual meeting in Orlando.

He added, though, his outlook for the housing sector is optimistic. “I think the longer-run housing outlook looks promising because of demographic trends and projected household formation,” Lockhart continued. “In the near term, the broad economy seems to be on a moderate growth path, which should be good news for your industry.”

Speaking for himself, Lockhart said he anticipated a very gradually rising interest rate environment over the next two years. “I do not see rates marching higher for an extended period in a preprogrammed tightening campaign,” he said. “The economy does not call for that, at least not at this time. Rate decisions will continue to be data-dependent and, therefore, meeting-to-meeting, in my view.”

Lockhart cautioned that Realtors should not interpret the prospect of rising rates as ominous. “Although higher interest rates will raise the monthly payment cost of housing for some new borrowers,” he said, “factors like wage growth and employment should improve overall affordability.”

Nov. 4, 2016 Realty News Report Copyright 2016 

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