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62 | TH E M R EP O RT SECONDARY MARKET THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T Will the Housing Market Maintain Momentum? Freddie Mac has said the housing market can experience a slight moderation in activity over the next two years. L ow mortgage rates and accelerated economic growth has meant the housing market has started the year with a bang. But will it maintain this momen - tum? According to Freddie Mac's January Outlook, a monthly report that looks housing markets and economic growth, although the housing markets have been improving every year for nearly a decade, it could see a slight moderation in activity through the next two years. "However, there are factors worth keeping an eye on in 2018, namely, is another recession on the horizon, how will housing markets respond to declining housing af - fordability, and how will young adults move the housing mar- ket—more are living at home with their parents today than in 2000," said Len Kiefer, Deputy Chief Economist at Freddie Mac. The report indicated that home sales, which stood at 6.35 million in December, housing construction at 1.3 million starts, and house pric - es that saw a 5.7 percent increase are all expected to be modestly higher in 2018 relative to 2017. However, the report indicated the economy, even though it would remain positive, would not be able to keep pace with home prices, resulting in declining af - fordability that could in turn lead to slow housing market activity. The report also indicated that with modest income growth, the high cost of living and high stu - dent debt meant that young adults were struggling to move out of their parents' homes and form their own households. Although a recession does not appear im - minent, Freddie Mac pledged to keep an eye on potential recession indicators, including the flattening (and potential inversion) of the U.S. Treasury yield curve and the current rate of unemployment (4.1 percent in December 2017). History has shown that an inverted yield curve and an unemployment rate below the natural rate usually leads to a recession in two-to-three years, the report said. Fannie Mae Tackles Affordable Housing and Sustainability Called "The Challenge," the $10 million initiative by the GSE will advance growth of sustainable communities. F annie Mae recently announced the formation of an Expert Advisory Panel to support The Challenge, a two-year $10 million initiative by the GSE to advance the growth of sustain - able communities while addressing the nation's affordable housing shortage. The GSE recently launched the first phase of its three-phase plan, which includes accepting contract proposals to be reviewed; the final round of review will be performed by the Expert Advisory Panel. "Affordable housing is not an isolated issue. It requires a broad set of solutions and dedicated individuals," said Maria Evans, VP, Sustainable Communities Partnership and Innovation. "We have brought together a stellar group of experts representing a diverse range of backgrounds and industries. All will bring an important perspective to the panel that will take us one step closer to improve access to affordable, sustainable communities." According to Fannie Mae, the Expert Advisory Panel is a "key element" of The Challenge, as it brings in experts in economic development, employment, and innovation, from the public, private, and nonprofit sectors. The panel will select proposals that it determines to be the most relevant in addressing issues regarding affording housing in the United States. According to Lucretia Murphy, Senior Director of Jobs for the Future, and Expert Advisory Panel member, efforts to increase economic mobility do not often connect with those to provide more affordable housing. This is a problem Fannie Mae hopes to address through The Challenge. "Investing in communities' efforts to develop a comprehensive solution for em - ployment and affordable housing could be a game changer for residents and communi- ties," said Murphy. "I look forward to serv- ing on the advisory panel for the Fannie Mae Innovation Challenge."