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February Reveals a Slow, Steady Path to Recovery

Yesterday, Freddie Mac released its U.S. Economic and Housing Market Outlook for February, showing cautious signs of the economy and housing market moving in a positive direction. The report attributes this good news to the current environment of low interest rates and more favorable job prospects.

Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators. Highlights from the report include:

  • Job gains exceeded expectations for the past two months, but those leaving their jobs voluntarily were 2 million in December compared to the pre-recession average of 3 million, reflecting worker uneasiness.
  • The unemployment rate fell to 8.3 percent; and weekly unemployment benefits applications decreased for the third consecutive week to 348,000, the fewest since the first week in March 2008.
  • More warmth is expected in the housing market sometime in 2013 as the economy continues on its slow path to a stronger recovery in a low-interest-rate environment.
  • Low mortgage rates will continue to keep homebuyer affordability high and help drive more HARP refinances.
  • Consumer sentiment weakened in January although home builder confidence continued to show signs of growth.

According to Frank Nothaft, Freddie Mac, vice president and chief economist, “The U.S. economy continues to build on the momentum from the end of last year. Our outlook anticipates gradual but steady improvement in the economy and the housing market, supported by low interest rates and brightening job market prospects.”