Freddie Mac: Quick recovery not likely in 2012

While Freddie Mac acknowledged that the U.S. economy has grown substantially in the last year, it says there are still too many obstacles deterring a speedy recovery nationwide, including the stalled housing and mortgage markets.

While Freddie Mac acknowledged that the U.S. economy has grown substantially in the last year, it says there are still too many obstacles deterring a speedy recovery nationwide, including the stalled housing and mortgage markets.

The government-sponsored enterprise's Economic and Housing Outlook for January states economic growth should rise to 2.1 percent during the first quarter. However, the unemployment rate as of the beginning of the year - 8.5 percent - is forecast to increase by the end of the quarter.

Homeowners should still be able to secure low mortgage rates throughout the year, though. The GSE says home loan rates should remain near all-time lows during the first few months of 2012, while home prices should stay at current levels through December.

"With the new year comes a sense of cautious optimism," said Freddie Mac's vice president and chief economist, Frank Nothaft. "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."

In another recently released report by the GSE, Nothaft points to consumers' preference for fixed-rate mortgages instead of adjustable-rate mortgages. He cites this trend, based on mortgage records from January 3 to 5, to uncertainty regarding the future of home loan rates.



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