Freddie Mac, much like Fannie Mae, is cautiously optimistic about the fate of the 2012 housing market with job prospects looking more favorable and interest rates remaining at all-time lows.
The government-sponsored enterprise predicts gradual, but steady, improvement in both the economy and housing market, supported by affordable home prices, low-interest rates and brightening employment prospects.
The GSE expects mortgage interest rates will stay low, making homeownership more affordable, while driving more refinancing activity. Fannie Mae released a similar report this week, saying housing could contribute to gross domestic product growth in 2012 for the first time in years.
Both companies recognize the potential for a eurozone crisis or other economic headwind remain, making their forecasts tepidly optimistic, at best.
While employment figures may have improved, a Gallup economic survey says the nation’s unemployment rate could surpass 9% in February, curtailing late 2011 and January job gains.
Still, initial unemployment claims fell last week to 348,000 filings, the lowest volume since March 2008.
Freddie says homebuilder confidence grew in January, but consumer sentiment weakened, indicating overall housing market growth will be slow this year.
