Freddie Mac's Chief Economist Frank Nothaft painted a portrait of housing that was cautiously optimistic. Flickr photo by m.a.r.c.

Freddie Mac released 2012’s first U.S. Economic and Housing Market Outlook this week, and amidst analysis of the job market and consumer confidence, the GSE’s Chief Economist, Frank Nothaft, painted a nuanced portrait of housing, one that, despite some tough spots, is undoubtedly more positive than 2011.

The state of the housing market, Nothaft wrote, is a matter of perspective, one that shifts based on whatever factor you happen to be studying.

For instance, though housing prices remained low in many of the nation’s top cities on account of distressed property inventories and seasonal lulls, housing starts posted huge year-over-year gains in 2011, rising by nearly 25 percent.

Additionally, the multifamily sector continues to be a major bright spot for builders, as it accounted for roughly a third of starts in recent months as builders attempt to meet the skyrocketing rental demand from consumers. Partly because of the multifamily sector’s recent ascendence, most forecasters expect 2012 to be the best home construction year since 2008, and Nothaft estimates housing starts to near 700,000, as residential construction comes off its first positive-employment year since 2005.

Nothaft also predicts that home sales will grow 2 to 5 percent year-over-year in 2012, considering that existing-home sales were up in November and the inventory of unsold homes, long a bane for the market, decreased to a six-to-seven month supply (though shadow inventories, strangely, were not mentioned). Historically-low mortgage rates (the 30-year FRM is currently at 3.88 percent) will also aid sales, and with the Mortgage Banker’s Association’s latest survey of the housing market finding that 80 percent of Americans see 2012 as a good time to buy a home, the demand for properties is clearly evident.

The flip side of the homebuying process, though – sellers – do not share buyers’ optimism, Nothaft wrote.

“Sellers are not as happy, according to the MBA survey, with only 7.6 percent of respondents stating they believe now is a good time to sell,” Nothaft wrote. “Compare that to between 40 and 60 percent before 2005. This is a historically large gap between sentiments of buyers and sellers. If the gap doesn’t narrow, the housing-market recovery will be delayed.”

Concluding his report with “cautious optimism,” Nothaft wrote that while 2012 will be a definite improvement over 2011, consumers should still be on their toes moving forward.

“With the New Year comes a sense of cautious optimism” he wrote. “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 mixed messages.”