By JEFF CLABAUGH
Washington Business Journal

Declaring the recession "unofficially" over, Fannie Mae's monthly economics and mortgage-market analysis predicts that the economy will achieve reasonable growth in the fourth quarter of this year.

"The question is whether the growth will be durable, especially after policy supports (that is, federal stimulus efforts) and the inventory cycle wane," the company's economists said. "Our forecast continues to show that growth is likely to moderate somewhat in the current quarter and early next year, before strengthening in late 2010."

With projected rising unemployment and declining core inflation through next year, Fannie Mae believes the Federal Reserve will leave interest rates unchanged until at least late 2010.

Home sales will rise 10 percent next year, though it forecasts that outstanding mortgage debt will fall 1.7 percent in 2010.

Fannie Mae says an excess amount of inventory will continue to weigh on the housing market in 2010. While homeowner vacancies remain below the record set in late 2008, they remain much higher than the long-term average, it says.

With the extension of the first-time-home-buyers tax credit until April and the expansion of the credit to include many buyers who are not first time-buyers, home sales are expected to continue to benefit.

Sales of existing homes jumped 9.4 percent in September, according to the National Association of Realtors, to the highest level in more than two years.