The latest Freddie Mac economic forecast predicts the housing recovery will be delayed as long as there remains a large gap between buyer and seller sentiment.
Frank Nothaft, chief economist for Freddie Mac, said, "With the new year comes a sense of cautious optimism. There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery. But the economy still is giving some mixed messages."
His commentary cites a Mortgage Bankers Association survey showing that while 80% of potential buyers think now is a good time to purchase a home, just 8% said now is a good time to sell.
This unusually wide dichotomy will hold back growth in the market, he believes.
For 2012, Freddie Mac expects home sales to grow between 2% and 5% over last year, as rates are likely to stay at historic lows in the early part of this year.
Still, Nothaft predicts mortgage volume will decline to about $1.1 trillion this year, from an estimated $1.3 trillion for 2011.
The economy comes down to jobs, and the picture here remains cloudy. While a net 1.6 million people were added to payrolls in 2011, there remain other issues. The level of underutilized workers was only 1.4% lower than a year ago while the Congressional Budget Office expects unemployment to hold at around 8.5% this year.
