Fannie Mae upgrades 2011 economic forecast

Resurgent jobs numbers and other improvements in the overall national economy have led mortgage giant Fannie Mae to upgrade its forecast for next year.

Fannie Mae says that it now expects the economy to grow 3.4 percent in 2011, up from the 2.9 percent growth rate that it had previously predicted. Analysts say that if jobs pick up, the housing market could be next.

"We expect modest increases in home sales, despite recent interest rate rises, due in part to modest additional declines in home prices, and we expect people to take advantage of affordability as their employment and income outlook brightens," said Fannie Mae chief economist Doug Duncan.

The company's forecast calls for home prices nationwide to gain 0.6 percent by the end of next year, and improve by 4.3 percent in 2012, as overall home sales increase by more than 11 percent.

Local jobs gains should also help boost the Houston real estate market. Data released last week by the Texas Workforce Commission found that the area gained more than 10,000 jobs in November, although the unemployment rate rose, perhaps as more people who had been on the sidelines started looking for jobs.