Despite worries that a recent spike in interest rates catalyzed by indications that the Fed may scale back its bond-buying could erode homebuyer demand, the real estate market is still likely to continue to improve in 2013, Freddie Mac said in its latest U.S. Economic and Housing Market Outlook report.

“The housing recovery keeps chugging along despite the recent market hysterics around Taper Talk, which caused mortgage rates to jump over the past month,” said Frank Nothaft, vice president and chief economist at Freddie Mac. “We won’t know the immediate impact on the pop in mortgage rates for another couple months. However, we don’t expect them to stall the housing recovery because demand is strong, supply is limited and housing affordability remains strong in most markets for most families.”

Through May, home sales had registered their fastest first-half year pace since 2007, with existing-home sales up over 10 percent compared with the first five months of 2012, and new-home sales up 29 percent, according to Freddie Mac. In the second half of the year, home sales should increase (new and existing) an additional 2 percent relative to the first half, the report said.

The report also forecast that new-home construction would increase by 12 percent in the second half of the year relative to the first half.

Meanwhile, the rapid rise in home prices is likely to cool as the year progresses, the mortgage giant said. With prices having likely jumped by 5 percent in the first half of the year, they are likely to grow closer to 3 to 4 percent in the second half, and post a gain of 8 to 9 percent for the calendar year. Source: Freddie Mac

Back to top
The best event in real estate kicks off next week! Tickets are selling quickly.Register Now×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription