Soft Patch or Double Dip?
MCLEAN, Va., July 18, 2011 /PRNewswire/ — Freddie Mac (OTC: FMCC) released today its U.S. Economic and Housing Market Outlook for July showing the housing market, buffeted by a recovering rental sector, is unlikely to experience a “double dip”, and will likely follow the performance of the overall economy for the remainder of 2011. Additionally, home sales are still projected to be up over 2010’s pace by 3 to 5 percent.
- Nonfarm payroll employment rose a scant 18,000, following a downward-revised 25,000 in May. In June, private sector job growth had slowed to a 57,000 gain for the month, largely offset by the continued downsizing of state and local payrolls.
- The unemployment rate ticked up for the third consecutive month to 9.2 percent, the highest in six months.
- The sluggish job update likely reflects a temporary “soft patch” in the economy rather than foreshadowing an inflection point in gross domestic product (GDP) growth.
- Despite record levels of home buyer affordability and historically low mortgage rates, households remain concerned over their financial futures and are holding off on major purchases, particularly homes.
- The rental housing market, continued to show the clearest signs of a turnaround with the Apartment Property Price Index showing a 15.2 percent gain over the year through the first quarter of 2011.
- After clear weakness in national price metrics through the first quarter, the FHFA Purchase-Only House Price Index for the U.S. was up 0.8 percent in April compared with March, and the S&P/Case-Shiller 20-city composite index registered a monthly gain of 0.7 percent (not seasonally adjusted) in April, the first positive monthly sign in eight months.
Click here to view the complete July 2011 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.
Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist.
- “Following June’s labor market report, households are naturally concerned about their financial futures which is being reflected in the housing market. Yet, the single-family market will likely improve over the balance of 2011, in keeping with positive GDP forecasts for the United States. Home sales are expected to be up over 2010’s pace, perhaps by 3 to 5 percent. And after clear weakness in national price metrics through the first quarter, there are glimmers the second quarter will likely show gradual improvement over time.”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.