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Nothaft: Economic indicators point toward improved housing

January 18, 2011 - The real estate market is set for a rebound, and more families will be unpacking their moving boxes in new homes this spring, according to Freddie Mac's chief economist and vice president.

In the government-sponsored entity's January economic outlook, Frank Nothaft said a number of economic indicators point to strengthening conditions and form a stable base for the housing market's recovery in 2011. He cited improvements in consumer spending as well as a number of policies that reduced payroll taxes by 2 percent and kept interest rates at a low level for a longer period of time. Those initiatives in particular put more money in consumers' pockets, said Nothaft, which could give them the confidence to call up a moving company.

More crucial to housing's recovery is an improvement in the job market. To that end, Nothaft referred to recent disappointing job reports as "noise," saying negativity obscures the long-term improvements that the employment picture has enjoyed.

"Jobs and incomes are set to begin rising again," said Nothaft.

Once negative report came from the Department of Labor last week, which reported that more workers were laid off during the week ending January 8, pushing initial claims for unemployment insurance to 445,000.
 

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