Friday, December 16, 2011 — As we soon close out a bumpy U.S. housing market ride in 2011, Freddie Mac’s chief economist Frank Nothaft is now making five housing market predictions for 2012.
Nothaft tells the World Property Channel, “While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly. Sustained and increased job growth beyond the average monthly payroll gains of 130,000 so far this year ending in November are essential. In housing, look for the rental market to lead the way and for some improvement in the single-family space in parts of the country. All told, next year will be another bumpy ride.”
Outlook Highlights
Economic growth will likely strengthen to about 2.5 percent in 2012.
The U.S. unemployment rate will decline but likely remain above 8 percent.
Mortgage rates will likely remain very low, at least through mid-2012.
Housing activity will be better in 2012, but not robust.
Expect less single-family originations but more multifamily lending in 2012.
Peering into 2012, Frank Nothaft predicts the following five housing market trends.
First, economic growth will likely strengthen to about 2.5 percent in 2012. U.S. economic growth appears to have accelerated in the waning months of 2011, with fourth quarter growth expected to come in around 2.5 to 3.0 percent, annualized, by most forecasters. Evidence to support the pick-up were stronger retail sales, low inventory levels, and a 477,000 three-month gain in private non-farm payroll employment from August through November. Given the anemic 1.2 percent annualized growth over the first three quarters of the year, the final quarter could provide some needed momentum as we head into 2012.
I thought this was a great article! I am excited to hear that they are still expecting the interest rates to be low! That's great news for home buyers, but don't DELAY!
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