Housing Shows Improvement Despite Labor Market Slowdown

Though job creation numbers have slowed during the second quarter, the housing market continues to show signs of improvement. According to Freddie Mac’s most recent Economic Outlook report, record-low mortgage rates and a revamped HARP program have fueled a surge in refinance activity, while housing starts, home sales, and prices have picked up across many markets. Over the first five months of 2012, housing starts have averaged an annual rate of 719,000, which represents a 26 percent increase over the same period one year earlier. At the same time, new-home sales are up 17 percent and existing-home sales have gained 7.0 percent. And though job growth has lagged after posting significant gains during the first quarter of 2012, the slowdown may be due to shifting economic activity caused by a mild winter. Frank E. Nothaft, Freddie Mac’s chief economist, said that housing has turned a very large corner, despite not having played its traditional role coming out of the recession. Freddie Mac expects that a gradual strengthening of economic growth during the second half of the year will boost job numbers and lead to further gains for the housing recovery. More here.

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