Despite predictions of a U.S. economic recession, it has not materialized this year, though the real estate industry faces a deep, sector-specific contraction.

According to the latest report from the U.S. Bureau of Economic Analysis, the nation’s total economic output experienced an acceleration in growth, rising at a rate equivalent to 2.4 percent over a full year during the second quarter of 2023. This growth exceeded expectations of a slowdown as the economy neared recession.

Increased consumer and government spending, as well as investments in nonresidential assets and private inventory, contributed to the economic uptick. However, a reduction in exports and a declining housing industry held back further progress.

Private residential investment was nearly 19 percent lower in the second quarter compared to the same period last year, though the industry’s productivity decline has slowed in recent quarters.

Mortgage Bankers Association chief economist, Mike Fratantoni, stated that the economy’s solid growth in the second quarter was fueled by steady consumer spending, reflecting the strength of the job market. However, the sharp drop in exports and the impact of restrictive monetary policies continue to pose challenges for the economy in the context of a weak global economy. The housing industry is gradually stabilizing, though it still faces headwinds amidst the ongoing contraction.