Drop in Home Sales Underscores Fragile Recovery According to Fannie Mae's Economic & Mortgage Market Analysis Group

Consumer Spending Shows Promise Despite Low Levels of Consumer Confidence

WASHINGTON, March 17, 2010 - Housing activity is expected to rebound later this year but at a slower
pace than previously projected according to the March 2010 Economic Outlook
released today by Fannie Mae's (NYSE: FNM) Economics & Mortgage Market
Analysis Group. A surprising drop in new and existing home sales
disappointed, but the setback is viewed as temporary with gains expected in
the second quarter then trending up on a sustainable basis by year end. The
outlook continues to call for moderate economic growth of 3.0 percent for
2010, as the labor market appears poised to create jobs, the service sector
shows improvement, and consumer spending joins in as part of the economic
storyline. Consumer spending grew a solid 0.3 percent in January, suggesting
a pickup in the first quarter despite the possibility of a slow down in
February.

"The recent growth in consumer spending is a positive sign for first
quarter gains. However, anxiety over job and income prospects continues to
weigh on consumer confidence which will likely lead to moderate spending
growth in the coming quarters," said Fannie Mae Chief Economist Doug Duncan.
"Strengthening growth in the service sector and more favorable financial
conditions overall keep us optimistic that we are moving forward with the
recovery, albeit at a lower trajectory than previously forecast."

The Economic Outlook includes the Economic Developments commentary,
Economic Forecast, and Housing Forecast — which detail movement of interest
rates, the housing market, the mortgage market, and the overall economic
climate. To read the full March 2010 Economic Outlook, visit the Economics &
Mortgage Market Analysis site at www.fanniemae.com.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's
Economics & Mortgage Market Analysis (EMMA) group included in these materials
should not be construed as indicating Fannie Mae's business prospects or
expected results, are based on a number of assumptions, and are subject to
change without notice. Although the EMMA group bases its opinions, analyses,
estimates, forecasts, and other views on information it considers reliable,
it does not guarantee that the information provided in these materials is
accurate, current, or suitable for any particular purpose. Changes in the
assumptions or the information underlying these views could produce
materially different results. The analyses, opinions, estimates, forecasts,
and other views published by the EMMA group represent the views of that group
as of the date indicated and do not necessarily represent the views of Fannie
Mae or its management.

Fannie Mae exists to expand affordable housing and bring global capital
to local communities in order to serve the U.S. housing market. Fannie Mae
has a federal charter and operates in America's secondary mortgage market to
enhance the liquidity of the mortgage market by providing funds to mortgage
bankers and other lenders so that they may lend to home buyers. Our job is to
help those who house America.

Pete Bakel of Fannie Mae, +1-202-752-2034