Skip to Page Content | Skip to Site Navigation | Skip to Section Navigation

Growing Pains as the Economic Recovery Turns Four

August 2013 U.S. Economic and Housing Market Outlook

MCLEAN, VA--(Marketwired - Aug 15, 2013) - Freddie Mac (OTCQB: FMCC) released today its U.S. Economic and Housing Market Outlook for August, showing that despite the lackluster jobs recovery four years into the economic recovery, housing will continue to provide an increasingly positive boost to GDP in the second half of 2013. A short preview video and the complete August 2013 U.S. Economic and Housing Market Outlook are available here.

Outlook Highlights

  • Four years of recovery have only brought lackluster growth. In terms of GDP growth, the current recovery most closely matches the one beginning in May of 1954, but during that four year period the economy also experienced another recession.
  • Fortunately, good news in the housing sector bodes well for future economic growth. Recently housing markets have shown solid growth. Housing starts were up 18 percent, home sales gained 13 percent, U.S. house price indexes were about 10 percent higher over the past year and serious delinquency rates have declined to their lowest level since the third quarter of 2008. 
  • A rapidly improving housing market will help the economic recovery in at least three ways:
    • First, increased demand for housing will help to stimulate new single-family and multifamily construction and boost home sales. Expect starts to hover just below one million (SAAR) over the second half of the year, the best six-month building pace since the first half of 2008.
    • Second, through the housing wealth effect, rising home prices should help to spur consumption spending. Some evidence that home equity lending has picked up was found in Freddie Mac's Refinance Report for the second quarter, which saw $9.5 billion in home-equity cashed-out as part of a refinance, which was up from a year ago. 
    • Finally, rising house prices will help the economic recovery by helping to spur small business formation, as a business owner's home often serves as collateral for a start-up

Quote
Attributed to Frank Nothaft, Freddie Mac vice president and chief economist.

"The economic recovery has completed its fourth year, but it has not been without growing pains. The U.S. has experienced the weakest economic recovery coming out of a recession in the Post-War era. Despite the eye-popping monthly house price appreciation taking place in some parts of the country, the recovery that has lingered for years is just now starting for many Americans. Fortunately, we should see this positive housing trend continue to improve in the second half of the year. A housing recovery is a broad-based recovery, benefiting all Americans, and therefore the overall economy."

Freddie Mac compiles data on major economic, housing and mortgage market indicators and offers forecasts based on those indicators.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. For more information please visit www.FreddieMac.com. Twitter: @FreddieMac








 

The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac does not undertake an obligation, and disclaims any duty, to update any of the information in those documents. Freddie Mac's future performance, including financial performance, is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company's future results are discussed more fully in our reports filed with the SEC.


Print Email RSS            
         

Get RSS Feed

Sign Up For Email Alerts

Connect With Us

Media Contact

For press inquiries only:

General
E-mail
(703) 903-3933

Non-press inquiries

Get the Picture

How are our local, state, and national housing markets faring? MiMi, our new housing index, explains.

Financial Results

CEO Don Layton discusses our third quarter 2014 financial results with the media.
Listen now

Our Commitment

Our commitment

See how our commitment to you and the nation is moving housing forward.

Search News Room

Back to Top