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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.


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


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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