The chief economist from Freddie Mac expects home sales in the Nashville area to rise about 5 percent next year. Frank Nothaft spoke to Middle Tennessee realtors Thursday, and forecast unemployment will tick down, but slowly.

Right now the U.S. has a one-in-three chance of slipping back into a recession, according to Nothaft. Barring that, he figures slow growth means unemployment will get a little better, but stay above 8 percent through the end of next year.

For realtors around Nashville, Nothaft said some positive news is home prices in the area seem unlikely to go much lower.

“Not to say that there’ll be robust growth again in the next year or two, but I have a sense that house prices have bottomed out. There isn’t as much excess inventory as we see in other markets. And prices here are only down 10 to 13 percent from the peak.”

The Greater Nashville Association of Realtors reported home sales increased in July and August compared to a year ago. Even so, Nothaft cautioned the roomful of realtors many potential homebuyers are likely to stay on the sidelines.

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Nothaft also defended the government’s backing of mortgages via Freddie Mac, saying it helps promote home buying and affordability. As chief economist of the beleaguered federal mortgage backer, Nothaft remarked it’s hard to know what will become of Freddie, saying that’s up to Congress. But he doubts much will change until after next year’s presidential election.

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