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""Freddie Mac"":http://www.freddiemac.com/ expects a 2 percent to 5 percent increase in home sales in 2012 amid moderate economic growth over the year, according to the GSE's U.S. Economic and Housing Market Outlook for January.
[IMAGE]Contributing to the anticipated rise in home sales are expectations that mortgage rates will remain near their current deflated levels and consumer confidence will pick up slightly.
Freddie Mac expects the economy to grow about 2.1 percent over the first quarter of this year and real gross domestic product growth to total 2.7 percent for the year.
Approaching the year with ""cautious optimism,"" Freddie Mac's chief economist, Frank Nothaft, says, ""There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.""
""But the economy still is giving mixed messages,"" he says.
For example, while the economy added 200,000 new jobs in December bringing the unemployment rate to its lowest level in almost three years, this positive movement is in part the result of seasonal hiring, and it ""likely will be reversed in January,"" according to Freddie Mac's outlook.
The GSE also points out that the rate of underemployed workers improved 1.4 percent over the past year.
Citing expectations of the Congressional Budget Office, Freddie Mac says unemployment will continue to linger at its current rate of 8.5 percent throughout the rest of this year.
Like unemployment, rising consumer confidence toward the end of 2011 may in part be seasonal.
The Conference Board Consumer Confidence Index posted its highest rate since April at the end of the year â€" 64.5.
The Small Business Optimism Index from the National Federation of Independent Business rose for the last four months of the year but remains lower than its January 2011 level.
The housing market finished the year with ""seasonally subdued"" prices, rising home sales in November, and a decline in inventory to a six to seven-month supply.
Citing a survey from the Mortgage Bankers Association, Freddie Mac points out that almost 80 percent of households say now is a good time to purchase a home, while 7.6 percent say now is a good time to sell.
""The housing-market recovery will be delayed as long as there remains a large gap between buyer and seller sentiment,"" according to the GSE.
