Freddie Mac projects continued housing growth in December

Freddie Mac projects continued housing growth in December
The Federal Savings Bank
December, 2012

Freddie Mac recently released its U.S. Economic Housing Market Outlook for December, showing long-term mortgage rates will remain near record lows for the first half of 2013.

The report also showed that property values will continue to increase with the housing price index likely jumping by 2-3 percent in 2013.

"The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive," said Frank Nothaft, Freddie Mac vice president and chief economist. "This has been a big change from a year ago, when some analysts worried that the looming 'shadow inventory' would keep the housing sector mired in an economic depression. Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery."

Foreclosures have also decreased recently, signaling a recovery in the housing market. The number of homes in foreclosure dropped in October from the previous month and was down 9 percent from October 2011, which might encourage more first-time home buyers to take a chance on the improving market.