Fannie Mae Says a 'Modest Recession' Is 'Expected' in Second Half of the Year The agency noted that unsustainable consumer spending and a slowing housing market may contribute to a looming recession.

By Madeline Garfinkle

Opinions expressed by Entrepreneur contributors are their own.

Image Source | Getty Images

The chatter of a looming recession continues, and the latest warning says it could happen this year.

In a press release on Friday, government-sponsored mortgage agency Fannie Mae warned that a "modest rescission" is "expected" in the second half of 2023, according to the agency's Economic and Strategic Research Group.

Fannie Mae noted that unsustainably high consumer spending and a slowing housing market are the likely culprits that foreshadow a looming recession.

As home sales have slowed over the past year, the agency predicts continued declines throughout the year due to a tight inventory and lack of affordability.

Related: Most Businesses Slow Down During a Recession — Here's How to Keep Pace and Grow Your Company in 2023

However, despite the current housing market being one of the main indicators of an upcoming recession, the sector has been relatively resilient, and could also be the driving force of the country's exit from a recession.

"Housing remains exhibit number one for why we expect the recession to be modest," Doug Duncan, senior vice president and chief economist at Fannie Mae said in the release. "It continues to outperform our expectations, and we expect that its relative strength will help kickstart the economy into expanding again in 2024."

Related: 'There's This Fear That Everything Will Crash': Home Prices Are Falling, But There's Still a Lack of Listings

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

This 29-Year-Old's Side Hustle Brought People 'to the Dark Green Side.' It Made $10,000 Within 2 Days and Sees 6 Figures a Month.

Nikki Seaman began work on her business when the pandemic led to grocery store shutdowns.

Side Hustle

How to Build Endless Passive Income With This Simple Online Hustle

Autopilot stores aren't just income streams. They are passports to freedom, flexibility and finally working and living on your own terms.

Business News

Here's How the CEO of the Biggest Bank in the U.S. Spends His Downtime: 'This Gives Me Purpose in Life'

JPMorgan CEO Jamie Dimon, 69, recently said that his top three priorities are his family, his country, and his purpose, which is working at the bank — in that order.

Business News

Elon Musk's xAI Is Hiring Engineers for Its Anime 'AI Companions' — With Salaries Up to $440,000 a Year

xAI launched a set of "AI companions" earlier this week, with a third on the way.

Health & Wellness

This Is the Newest Real Estate Trend You Can't Miss — and It's Worth $438 Billion

A rapidly emerging new trend is sweeping the global real estate sector, powered by humanity's collective desire for longer lives and healthier lifestyles. Here's what entrepreneurs should pay attention to to capture the new market.

Marketing

Why Most Startups Fail to Get National Press — and What To Do Instead

Tech startups often struggle to gain national news coverage. Here's how startups can achieve that elusive national media attention.