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Housing ‘a bright spot’ amid tepid economic growth

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With weak consumer spending and a lackluster job market, the economy is likely to grow at a slower rate this year than previously forecast, according to the latest monthly economic outlook from Fannie Mae's Economic & Strategic Research Group. Fannie Mae economists have cut their projection for 2012 gross domestic product (GDP) growth to 2 percent, down from 2.2 percent in a forecast issued last month. GDP grew 1.9 percent in the first quarter and is estimated to have grown 1.8 percent in the second quarter. Nonetheless, home sales have risen 9 percent since this time last year, housing starts are up about 20 percent, and residential investment is poised to contribute to economic growth for the first time since 2005, Fannie Mae economists said. "Despite signs of deteriorating momentum for economic activity, housing continues to be a bright spot as news from the housing market has been relatively upbeat, presenting a rare upside boost to the economy," said Doug Dun...