Freddie Mac released recently its U.S. Economic and Housing Market Outlook for May showing for the most part encouraging signs with the release of several first-quarter 2012 economic indicators.
- Initial estimates for first-quarter 2012 economic growth was 2.2 percent, slower than the previous quarter, but better than three of the past four quarters.
- Personal consumption expenditures grew at a 15.3 percent annual rate reflecting continuing strength in consumer durables such as cars and kitchen appliances.
- Residential fixed investment like new housing construction and remodeling expenses have been a net positive contributor to growth for four straight quarters; however, it remains weak for this stage of the economic recovery compared with previous business cycles.
- Home prices at or near a trough in many markets bodes well for further declines in delinquency rates.
- Fixed-rate mortgage rates are the lowest in more than 60 years, providing extraordinary home-buyer affordability in many areas and likely translating into a sales pickup relative to last year.
According to Frank Nothaft, Freddie Mac, vice president and chief economist, “Taken together, the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery. While not uniformly positive, for the most part the data trend in the right direction.”