Fannie Mae predicts the second half of 2014 will pick up steam, according to the September Outlook report compiled by its Economic & Strategic Research Group.

The GDP for the second quarter of 2014 was upgraded from 4.0 to 4.2% in the government’s second estimate, and the final estimate will be released on Sept. 26.

Fannie economists think that recent data through June showed upward revisions on net, suggesting that second quarter growth likely will be revised higher.

“In our September forecast, we see the economy continuing to accelerate toward 3.0% growth in the second half of the year, in line with our prior forecast,” said Fannie Mae chief economist Doug Duncan. “Business spending and confidence are trending up, and we expect to see a healthy increase in business capital investment in the third quarter following the double-digit annualized gain in the second quarter.”

Duncan did warn on consumer caution but expects confidence to grow.

“Consumer spending fell unexpectedly in July, as more Americans appeared to be building their savings amid weakened income expectations, however a surge in auto sales suggests a reversal in August. If the labor market continues to improve, consumers will likely be more willing to take on additional credit card debt, giving a boost to spending growth,” he said. “Additionally, a decline in crude oil prices again in August has lowered the cost of gasoline, which we expect to add to disposable income and support spending in the current quarter.”

Duncan said all in all, he is sticking by his previous month’s position, and that housing is still trying to get a toehold.

“Recent housing activity isn’t quite as positive, having shown only lukewarm growth since a promising start to the third quarter, but our forecast is little changed from August,” said Duncan. “Purchase mortgage applications have trended down over the past three months, despite the declining interest rate environment. We believe this suggests a residual conservatism on the part of consumers and supports our view that the pace of growth in the housing sector will be subdued during the remainder of 2014, with modest improvement in 2015.”