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Freddie Mac chief economist expects housing market to improve in 2011

Freddie Mac chief economist believes the housing market will improve in 2011.

Freddie Mac chief economist believes the housing market will improve in 2011.

Freddie Mac chief economist Frank Nothaft cited in his blog some significant macroeconomic components of the economy that he believes will push start an eventual recovery in the housing and mortgage markets in 2011, possibly an encouraging sign for people thinking of moving into a new home in the near future.

The key factors include income growth, the unemployment rate and inflation. In the blog, Nothaft noted the economic recovery will steadily gain momentum throughout 2011 due to fiscal and monetary policies that are providing low interest rates and affordable properties.

Furthermore, Nothaft indicated that the second half of 2011 will see more economic growth and job creation. "The three main ingredients that affect buyer affordability are mortgage rates, house prices, and income," he said. "With the first two at or near cyclic lows, buyer affordability is at the highest level in decades."

Other vital factors that will make up next year's housing and mortgage markets include house-price recovery, fewer mortgage originations and lower delinquency rates.

The chances of homebuyers moving into a reasonably priced home in the U.S seems realistic. The National Association of Realtors released their most recent Housing Affordability Index which showed that the median price for an existing single-family home is $171,100.