America’s economy is in a better place than previously thought, new Fannie Mae research shows.
The mortgage company’s Economic and Strategic Research (ESR) Group released these findings Thursday (Oct. 17), based on annual revisions to national accounts and improved employment numbers in August and September.
“While the ESR Group still expects economic growth to slow from the robust 3.2 percent pace recorded in 2023, the degree of expected slowing is smaller; growth in 2024 and 2025 is now expected to be 2.3 percent and 2.0 percent, respectively, near the long-run trend growth rate,” Fannie Mae said in a news release.
According to the release, the improved outlook comes largely from major upward revisions in personal income data, showing the “relationship between income and consumption” to be nearer to historical levels.
As such, the ESR Group believes the economy can maintain growth closer to its long-run potential through its forecast horizon, barring an unforeseen shock to consumer or business confidence from an adverse exogenous event.
The group also expects annual home prices to grow 5.8% in 2024 and 3.6 %in 2025, up from earlier forecasts of a respective 6.1% and 3%.
“While potential homebuyers have noticed the decline in mortgage rates over the last few months, they are equally aware that there has been little relief on the home price side, the other primary driver of unaffordability, particularly for first-time buyers,” Fannie Mae Chief Economist Mark Palim said.
“The timing of the long-expected pick-up in home sales activity, as well as a further moderation in home price appreciation, will depend in part on the willingness of current homeowners to relinquish their low mortgage rates by offering their homes for sale.”
The findings came the same day as the latest government figures on consumer spending, which showed a slight uptick, even as bigger-ticket items saw a pullback.
The data lines up with what earnings season has shown so far, with the likes of JPMorgan and Citi showing “reasonably solid metrics on card spending,” as PYMNTS wrote.
JPMorgan management has said spending is returning to “normal,” in the post-COVID era, while Citi noted the “surprisingly resilient” consumer and Wells Fargo management indicated that rate cuts should ease some pressures on consumers.
That’s especially true for consumers with lower incomes, with PYMNTS consistently documenting the paycheck-to-paycheck pressures confronting those consumers and households.
Brazil’s instant payment system, Pix, will reportedly allow users to pay for transactions in installments, beginning in September.
The new feature, Pix Parcelado, will be available to both consumers and businesses, Reuters reported Thursday (April 3), citing Brazil’s central bank.
While payers will have the option to pay over time, payees will receive the full payment immediately, according to the report.
“The feature has the potential to boost Pix usage in retail for higher-value purchases, benefiting those without access to traditional credit options,” the central bank said, per the report.
The central bank also said it will add another feature that will allow future Pix receivables to be used as collateral for credit operations, according to the report. This feature is set to debut in 2026.
Forty-three percent of Brazilian consumers use the Pix instant payments platform daily, compared to 29% who rely on credit cards and 21% who use cash, according to the PYMNTS Intelligence and Galileo collaboration, “Promising Payments: Digital Payments Gain Ground in Latin America.”
The report also found that 82% of Pix users report the payment method has a positive impact on their daily lives and that Brazilian consumers also embrace digital banking, with 95% of consumer interactions with banks occurring through digital channels.
Pix was launched at the end of 2020 but quickly bloomed in popularity, in large part due to the instant payment platform’s simplicity and ease of use, according to the PYMNTS Intelligence and Kushki collaboration, “Digitizing Payments in Latin America Playbook.”
Pix is also set to add a recurring payments feature called Automatic Pix that will be able to be used as a payment method by companies of different sizes and in different sectors.
“For the paying user, Automatic Pix will bring even more convenience, offering a frictionless recurring payment alternative,” Brazil’s central bank said in July. “With prior authorization, given in the account’s secure environment by the access device itself (cell phone or computer), the user will allow periodic debit automatically, without the need for authentication for each transaction.”
“For the receiving user, Automatic Pix has the potential to increase efficiency, reduce the costs of collection features and reduce default,” the central bank added.
