MCLEAN, VA - Freddie Mac released its U.S. Economic and Housing Market Outlook for June showing that stronger home sales growth remains dampened by declining consumer confidence and economic uncertainty. Regardless, during the first four months of 2011, average monthly sales of existing homes are up approximately 5 percent from the average pace of 2010.
Outlook Highlights
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Net job creation was 54,000 for May – less than one-third the average pace for the first four months of 2011; unemployment rate ticked up for the second straight month to 9.1 percent, the highest this year.
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First quarter data on U.S. house-price softness has removed a catalyst to immediate action: some potential homebuyers are waiting for clearer signs home values have firmed.
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Supply chain interruptions related to the earthquake and tsunami in Japan and severe weather-related disruptions reducing employment gains are likely to be reversed in the coming months.
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More robust economic growth is expected to return during the second half of the year supported by the accommodative monetary policy pursued by the Federal Reserve Board.
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During the first four months, average monthly sales of existing homes were up about 5 percent, inline with the projected 5 percent increase in 2011 home sales over 2010, on a calendar year basis.
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The National Multi Housing Council reported that property managers in most local markets have found a tightening in rental markets and greater availability of equity and debt financing, and released a relatively upbeat Market Tightness Index of 90.
Click here to view the complete June 2011 U.S. Economic and Housing Market Outlook. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.
Quotes
Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist.
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"Even though near-term concerns over income and sales growth are restraining consumer spending, business hiring, and new building, there have been a number of positive signs in the economy that growth will continue and is likely to accelerate in the second half of this year.
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"While parts of the housing industry remain weak, the rental market has clearly strengthened and homes sales are above last year's pace. Look for a gradual but substantive improvement in housing activity in the coming year."
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.
Source: Freddie Mac