An improving economy is contributing to a gradual rebound in home prices across
the country, according to mortgage giant Freddie Mac’s 2012 Economic Outlook
report, released Wednesday. But there is still a way to go in the road to
recovery for the housing market, the report noted.
“The housing market is showing some signs of shaking off the depression-like
conditions that have plagued it for much of the past few years,” according to
the report. “As if awakening from hibernation, housing starts and home sales
moved to higher levels of activity.”
In fact, the signs have prompted Freddie Mac to revise its forecast upwards for
home sales and originations. One economic contributor that’s helping to
stabilize housing: The drop in the unemployment rate to 8.3 percent, its lowest
level in three years, according to the report.
“A variety of encouraging indicators suggest that the housing market may be feeling
a nascent recovery ... and more neighborhoods may see a stabilization in overall
demand and housing values this spring,” says Frank Nothaft, Freddie Mac’s chief
economist.
Median home sale prices are up, despite a slight drop in new and existing home sales,
Freddie Mac reports. About a half of the increase in housing starts has been for
construction of rental apartments in multi-unit buildings to meet the increasing
demand, the report notes. New rental construction, at its current pace, is
expected to reach its highest level since 2005.
“Housing starts continue to run below net household formations [and will allow for
absorption of existing vacant homes],” according to the report.
Source: “Freddie Mac: Economic Growth Expected to Stabilize Housing Market,” Dow Jones
Newswires (March 28, 2012)