U.S. economy expected to grow faster in 2012, economists say

December 28th, 2011

Economists surveyed by the Associated Press said they expect the U.S. economy to grow faster in 2012. But Europe's debt crisis remains a real threat that could stall growth in the U.S.

Home prices decline

Economists expect the economy to grow 2.4 percent in 2012, compared with less than 2 percent in 2011. In addition to the potential for outside forces to impact the U.S. economy, the housing market is still a drag. Home prices continue to struggle to recover, making it tough for many Americans to sell or refinance.

The Standard & Poor's/Case-Shiller Home Price Index for 20 leading cities shows that home prices dropped 3.4 percent in October 2011 from a year earlier and 1.2 percent from the previous month. Nineteen of the cities saw home prices decline over the month.

According to David M. Blitzer, Chairman of the Index Committee at S&P Indices:

Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness. Atlanta was down 5.0 percent over the month, after having fallen by 5.9 percent in September. It also has the weakest annual return, down 11.7 percent. Chicago, Cleveland, Detroit and Minneapolis all posted monthly declines of 1% or more in October. These markets were some of the strongest during the spring/summer buying season. However, Detroit is the healthiest when viewed on an annual basis. It is up 2.5 percent versus October 2010. Atlanta, Cleveland, Detroit and Las Vegas are four markets where average prices are below their January 200 Levels; and Atlanta and Las Vegas posted new lows in October.

Free mortgage calculators

If you are trying to refinance or purchase a home despite the economy, mortgage calculators could help you decide if it is time to act. The amortization calculator shows exactly what your monthly mortgage payments would be. While it may be a bit scary to think of getting into a new mortgage with home prices continuing to decline, interest rates are near historic lows. For most borrowers with good credit, mortgages are affordable.

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