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Economy, Housing Market a Mixed Bag in 2012: Forecast

The economy and housing market enter the New Year with mixed results, and will likely remain that way for at least the first part of 2012, ""Freddie Mac"":http://www.freddiemac.com/ forecasted in a report Thursday.

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Citing numerous indices in his outlook, ""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, VP and chief economist with Freddie Mac, predicted that economic growth will likely hit 2.1 percent in the first

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quarter, up from the doldrums during the financial crisis.

""With the new year comes a sense of cautious optimism,"" he said. ""There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery.""

He added: ""But the economy still is giving some mixed messages.""

He said that U.S. unemployment, which ticked below 9 percent in December, will likely remain around 8.5 percent following a reversal for seasonal job growth.

Mortgages rates ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô which Freddie said slammed into 3.88 percent for the 30-year fixed-rate mortgage Thursday ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô will also stay near rock bottom in the first part of the year.

Nothaft ""forecasted"":http://www.freddiemac.com/news/finance/docs/Jan_2012_public_outlook.pdf that home sales would likely increase somewhere between 2 percent and 5 percent year-over-year in the New Year, and that a delay in the housing recovery will stay around, so long as a divide remains between buyers and sellers in purchase and sale decisions.

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