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Freddie Mac Releases 2012 Economic Outlook

Mortgage giant ""Freddie Mac"":http://www.freddiemac.com/ revealed its December outlook Wednesday, forecasting that U.S. economic growth would likely climb to 2.5 percent over 2012 and that mortgage rates would stay at record lows.

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The GSE also pitched ideas that housing activity will scale upward but fail to reach ""robust"" levels seen in years prior.

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""While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly,"" ""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, VP and chief economist with Freddie, said in a statement.

The company said that mortgage rates would stay low, with 4 percent for the 30-year fixed-rate mortgage leading the way recently.

Nothaft forecasted that recent modifications to the Home Affordable Refinance Program would increase refinance originations by more than $100 billion over the next year, giving a lift to purchase-money lift but letting single-family originations to enter a shortfall over the next year.

""Sustained and increased job growth beyond the average monthly payroll gains of 130,000 so far this year ending in November are essential,"" he added. ""In housing, look for the rental market to lead the way and for some improvement in the single-family space in parts of the country.

""All told, next year will be another bumpy ride,"" he said.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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