January Housing Market Outlook Highlights:
- 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.
- For 2012, expect home sales to grow between 2 and 5 percent year-over-year.
- The housing-market recovery will be delayed as long as there remains a large gap between buyer and seller sentiment.
According to Frank Nothaft, Vice President and Chief Economist at Freddie Mac: "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."
Builder confidence in the market for newly built, single-family homes continued to climb for a fourth consecutive month in January, rising four points to 25 on the NAHB/Wells Fargo Housing Market Index (HMI), released today. This is the highest level the index has attained since June of 2007.
"Builder confidence has now risen four months in a row, with the latest uptick being universally represented across every index component and region," noted Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "This good news comes on the heels of several months of gains in single-family housing starts and sales, and is yet another indication of the gradual but steady improvement that is beginning to take hold in an increasing number of housing markets nationwide -- and that has been shown by our Improving Markets Index. Policymakers must now take every precaution to avoid derailing this nascent recovery."
