“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.”
In Freddie Mac’s U.S. Economic and Housing Market Outlook for December, Nothaft made the following predictions for housing in 2013:
- Long-term mortgage rates will remain near their record lows during the first half of 2013 and rise gradually during the second half of the year, but remaining below 4%.
- Property values will continue to strengthen with most U.S. house price indexes likely rising by 2.5% to 3% percent in 2013.
- Household formation should increase to a net 1.20 to 1.25 million household, while housing starts should increase to approximately 1 million (annualized) by the fourth quarter.
- Vacancy rates for both apartments and the single-family for-sale market could bring aggregate vacancy rates down to 2002-2003 levels, as household formation outpaces new construction.
- The refinance boom will continue into early 2013. However, single-family refinances will decline by 15% next year compared to 2012, while multifamily lending is expected to increase approximately 5 percent.
Source:
December 10, 2012
