Freddie Mac Reports Some Encouraging Q1 Housing Market Signals

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Despite a recent disappointing jobs report last month, there may be a silver lining in the U.S. housing market in May.

According to Freddie Mac's recently released May 2012 U.S. Economic and Housing Market Outlook, 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.

Frank Nothaft, Freddie Mac vice president and chief economist said, "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 is going in the right direction."

Freddie Mac U.S. Housing Outlook Highlights Include:

• 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.