Hopeful Signs Emerge in Consumer Spending and Employment According to Fannie Mae's Economics & Mortgage Market Analysis Group

Slightly Upgraded Forecast for Economic Activity in 2011

WASHINGTON, November 18, 2010 - Improving financial conditions and recent encouraging signs from the
labor market should set the stage for an above-par growth trend by mid 2011,
according to the November 2010 Economic Outlook released today by Fannie
Mae's (OTC Bulletin Board: FNMA) Economics & Mortgage Market Analysis Group.
Despite challenges, including uncertainty on the domestic fiscal policy and
international fronts, improvement in economic activity will likely occur at a
gradual pace moving into 2011. The economy showed a slight pickup in growth
in the third quarter to 2.0 percent at an annualized pace, up from 1.7
percent in the previous quarter, and consumer spending posted the best
showing since the end of 2006. Even with stronger than expected economic
growth in the third quarter, the group forecasts continued sluggish growth at
least through the first quarter of 2011.

Foreclosure issues are expected to keep home sales subdued in the final
quarter of 2010 but the group expects to see a gradual improvement in 2011.
"For all of 2010, total home sales are projected to decline by about 8
percent from 2009, marking the bottom of annual total home sales in this
cycle," said Fannie Mae Chief Economist Doug Duncan. "We expect home sales to
increase by about 3 percent in 2011. However, the pace of recovery will
largely be determined by labor conditions. If hiring improves at a faster
pace than expected, home sales will likely see a stronger gain in 2011 and
vice versa."

For an audio synopsis of the November 2010 Economic Outlook, listen to
the podcast on the Economics & Mortgage Market Analysis
(www.fanniemae.com/media/economics/index.jhtml?p=Media&s=Economics+%26+Mortgage+Market+Analysis)
site at www.fanniemae.com. Visit the site to read the full November
2010 Economic Outlook, including the Economic Developments Commentary,
Economic Forecast, and Housing Forecast.

New this month and available via link from the Economic Developments
Commentary is a Multifamily Market Commentary by Kim Betancourt, Director,
Multifamily Economics and Market Research. The Commentary provides
information on current multifamily market conditions.

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. How this information affects Fannie Mae will depend on
many factors. 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, +1-202-752-2034 or Resource Center: 1-800-732-6643