BluefoxToday blog : Freddie Mac US Economic Outlook For 2012

Freddie Mac US Economic Outlook For 2012


Freddie Mac rolled out this week it’s outlook for the U.S. Economy for 2012.  Freddie Mac is predicting that our economy will grow by 2.5% during the upcoming year, and that the already record low Interest Rates will continue to stay at record low levels.

Freddie Mac is also predicting that the activity in Housing will increase, but it just at a modest rate.  According to Frank Nothaft , Chief Economist for Freddie Mac  While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly,”  

It looks like we are likely to close off 2011 with rates at about 4% with no points on a 30-year fixed-rate mortgage.  It would be unheard of, but is it possible for Interest Rates to drop below 4%?

Nothaft also feels that the recent changes to the Home Affordable Refinance Program will increase refinance by more than $100 billion in refinanced loans.  Here I am prone to disagree with Mr. Nothaft for the simple reason that many people do not have much equity in their homes, and in several cases homeowners are underwater when it comes to the present value of their homes.  We will have to wait and see if the Home Affordable Refinancing Program will have an impact, but even if it does $100 billion is a very optimistic figure. 

Last of all the Rental Market is predicted to continue to grow as Buyers continue to be very cautious, because of job security, and feeling that prices and Interest Rates will continue to go down.

Hopefully some of these predictions will come true, and 2012 starts to turn things around in the Real Estate Industry.


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Comment balloon 7 commentsGeorge Souto • December 15 2011 08:32PM


Hi George the only part of the report I will comment on is the part pertaining to the rental market.  I do believe it will continue to grow.

Posted by Jennifer Fivelsdal, Mid Hudson Valley real estate connection ( JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571) about 9 years ago


Interesting news, and certainly time will tell. Several mortgage brokers I have talked with said the same things about rates.

I have seen some reports (Moody's for example) predicting a drop in prices of 5 - 7% in the 1st Q or so and then a rise in pricing. And I've seem some predictions of an overall increase in sales volume by end of 2012 over 2011. If the rates stay low this keeps the overall affordability at a level we have not seen in a very long time, and a good time for those who are qualifed to take advantage.

Who knows that all that is going on in Europe is going to mean, but it's likely to have some sort of impact.


Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California, Inc.) about 9 years ago
Interesting news! The new(ish) refi program is will help those who are underwater - even if they are upside down 50 percent most can refi at the current interest rate. Hopefully it will slow down the foreclosures.
Posted by Kerry Lucasse, Your Urban Nest Atlanta Real Estate Consultant (eXp Realty - Urban Nest Real Estate Group) about 9 years ago

George, i am hearing the same thing from economists i know...slow & steady but everything they say hinges on how the Euro Union handles their it is wait & see...We all missed you at Dagny's last night!

Posted by Ginny Gorman, Homes for Sale in Southern RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) about 9 years ago

The neat part of all these comments for economists, they are all guessing. I'm probably speaking for you as well, you will continue to use your own intuition, which will continue to guide us going forward.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) about 9 years ago

George -- Good guesses at best. The RE market will chug along for those who HAVE to sell or those who are in a position to take advantage of moving up. Beyond that, I am with Ginny.  How Europe shakes out is going to have a big effect on us....either way.

Posted by Barbara Altieri, REALTOR-Fairfield County CT Homes/Condos For Sale (Kinard Realty Group Fairfield and New Haven County CT Real Estate) about 9 years ago


Many homeowners in the hard-hit states who really could use a refinance to a these super low rates can't do so because of the underwater status. Anyhow, Freddie's forecast gives us hope that things are moving slowly in the right direction. 

Posted by Esko Kiuru about 9 years ago

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