Fannie Mae projects further weakened economy, housing market

A weak consumer outlook and continued issues in the housing market were the main reasons for Fannie Mae's Economics & Mortgage Market Analysis Group's poor forecast for the remainder of the year.

The group's August 2011 Economic Outlook shows it believes another recession could take place beginning at some point between now and December.

After economic growth of 3.1 percent last year, growth is expected to slow to 1.4 percent this year. Additionally, the group said housing activity is expected to slow further due to an uneven jobs market and a dip in consumer confidence.

"Our July data shows that 70 percent of Americans think the economy is on the wrong track, up from 60 percent a year ago," said Fannie Mae chief economist Doug Duncan. "In turn, despite historically low interest rates, consumers are still saying they don't see this as a good time to go out and borrow money to buy a house."

Many consumers have a dour outlook for the economy due to credit issues. However, some consumers may be held back from obtaining a loan because they have errors on their credit report. To get it fixed, these consumers may want to consult a credit lawyer.