Freddie Mac says housing sector unlikely to see double dip
Despite uncertainty about the debt ceiling and an unemployment rate that remains stubbornly higher than 9%, Freddie Mac said the housing market is unlikely to experience a double dip.
In its July economic and housing market outlook report, Freddie said the market "will likely follow the performance of the overall economy for the remainder of 2011" with home sales projected to rise above last year's pace by 3% to 5%.
Freddie noted the 9.2% unemployment rate remains a concern, but said "the sluggish job update likely reflects a temporary soft patch in the economy rather than foreshadowing an inflection point in gross domestic product growth."
The one segment of the market were a turnaround is taking place is rental housing, with Freddie's first-quarter apartment property price index up 15.2% from last year. The Federal Housing Finance Agency purchase-only house price index in the U.S. rose 0.8% in April when compared to March.
"Following June's labor market report, households are naturally concerned about their financial futures, which is being reflected in the housing market," said Frank Nothaft, Freddie Mac, vice president and chief economist. "Yet, the single-family market will likely improve over the balance of 2011, in keeping with positive GDP forecasts for the United States."
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