In the February Economic Outlook from Freddie Mac's Office of the Chief Economist is projecting a slow, steady path to recovery as the economy, it says, continues to build on the momentum it displayed at the end of last year. The report cites 243,000 new jobs in January, an unemployment rate falling to 8.3 percent and an increase in job openings to 3.4 million in December as indications of improvement. At the same time, there was a relatively low level of 2 million "voluntary separations," i.e. people quitting their jobs, that reflects a nervousness about the job market and a 1.2 percent drop in inflation-adjusted hourly wages, the steepest annual fall since 1989, also signaling job market weakness.
The housing sector portion of the Freddie Mac report was a summary of information for the month already reported here from sources such as the National Association of Realtors®, S&P/Case-Shiller, Mortgage Bankers Association, and others. Most of the housing data shows improving sales, declining inventories, and continued softening of home prices. Freddie Mac said it expects "more warmth" in the housing market sometime in 2013 "as the economy continues on its slow path to a stronger recovery in a low interest-rate environment."
The office is projecting that, by the end of 2013 housing starts will be at an annual level of 1 million (compared to 1.36 million in 2007, the last year before the market collapsed) and sales of 5.05 million (compared to 5.19 million.) Prices are expected to gain some footing this year and begin to increase in the first quarter of 2013.