U.S. economy to slow but still generate high demand for real estate

The U.S. economy is expected to grow between 2 percent and 2.5 percent in 2019, slower than that seen in 2018 but strong enough to generate continued demand for real estate, according to Nuveen: Think U.S. cities outlook for second quarter 2019.

The effects of the tax cuts and fiscal stimulus will continue to propel economic growth, but the odds of a recession are starting to rise as the U.S. economy enters its 10th year of expansion.

By many measures, the U.S. economy is the strongest it has been in decades. In 2018, U.S. consumer confidence reached an 18-year high while the unemployment rate reached an 18-year low. Given this backdrop and as long as the economic growth continues, Nuveen expects the U.S. real estate cycle to last at least another year if not longer.

GDP growth is expected to be 2.1 percent in first quarter 2019, despite the government shutdown. The Bloomberg Consensus of economists pegs the probability of a recession in 2019 at a mod