The unemployment rate is projected to edge lower this year and home sales are expected to rise at a rate similar to last year’s, while interest rates are projected to remain relatively low throughout 2013, mortgage-finance company Freddie Mac said.
Despite fiscal uncertainties facing the U.S., the company said consumer confidence has remained fairly resilient in recovering from its recession lows, buoyed by improving labor and housing market news. Business owners and managers, however, are more sanguine about the nation’s business outlook than consumers seem to be, according to its U.S. Economic and Housing Market Outlook.
Freddie Mac said 1.86 million jobs were created last year, representing the largest annual gain since 2006. Of that, 155,000 jobs were created in December, while November’s payrolls were revised up 24,000, keeping the unemployment rate steady at 7.8%–the lowest since December 2008.
The unemployment rate is expected to provide support for a continuation of an accommodative policy stance by the Federal Reserve through the coming year, making a case for relatively low interest rates for mortgage lending and the broader capital markets, the company said.
Freddie Mac said home sales for the first 11 months of last year grew 9% from the year earlier, leading to expectations of similar results this year.
“As we begin 2013, the economy is undoubtedly at a better place now than at this time in 2012. And despite the clouds of fiscal uncertainty facing the country, positive jobs reports and the strengthening housing market continue to be the bright spot as we begin the New Year,” said Frank Nothaft, Freddie Mac vice president and chief economist.
Last week, sister company Fannie Mae reported that consumer confidence in the U.S. housing sector rose in December to the highest level since 2010. Fannie Mae said its poll of 1,002 Americans showed that most expect home prices to increase an average of 2.6% over the next year.