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Markets and Economy

Economic Commentary

The housing market is hot

The housing market extended its strong post-COVID surge into August. Demand continues to increase for owner-occupied housing, pushed up by record-low mortgage rates, a rebound in the job market, faster household formations, and an increased desire for “space.” Existing home sales rose by 2.4 percent to an annualized pace of 6.00 million units for August, while new sales climbed by 4.8 percent over an upwardly revised July figure to 1.01 million units (annualized). The August sales pace for both was the fastest since 2006. 

Economic Commentary

A surge in growth for the third quarter, but slower growth ahead continues

The post-COVID recession recovery continued at a strong pace in August with further sharp improvement for the labor market and solid expansion from the business sector. The rapid rebound in spending and hiring should drive a record 25-30 percent annualized surge in real GDP during the third quarter. After slower expected growth in the fourth quarter, the expansion should move forward at an above-trend pace in 2021 as vaccines become widely available. Key risks to the outlook include the timing of vaccine availability and the November elections.