"Perspectives on the housing market depend on where you sit," according to Freddie Mac's U.S. Economic and Housing Market Outlook for January. The monthly forecast noted that existing home sales increased in November, the inventory of unsold homes decreased to a six to seven month supply, and Freddie Mac's economists predict home sales will grow between 2 and 5 percent in 2012.
But there is "a historically large gap between sentiments of buyers and sellers." Nearly 80 percent of American households believe it is a good time to buy a home, but sellers are not as happy, with only 7.6 percent who responded to a Mortgage Bankers Association survey believing that it is a good time to sell. If this gap doesn't narrow, Freddie Mac's economists say, the housing-market recovery will be delayed.
The monthly report titled Toasting the New Year with a Glass Half Full concludes that, while the economy is undoubtedly in a better place that the same time a year ago, a speedy recovery still seems unlikely this year.
Other highlights of the Outlook
- Economic growth will likely strengthen to about 2.1 percent in the first quarter.
- The current U.S. unemployment rate of 8.5 percent is likely to increase after seasonal gains are reversed.
- Mortgage rates are projected to remain very low, at least in the beginning of 2012.
Frank Nothaft, Freddie Mac, vice president and chief economist said, "With the new year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery. But the economy still is giving some mixed messages."
