Every Friday, Jenny Baker will be summing up the latest in this week's mortgage news.Here is what was at the top of the headlines for the mortgage industry this past week:1. Avoiding a Double-Dip Recession Could Depend on the Housing Industry In its August Economic and Housing Market Outlook Freddie Mac celebrates, sort of, a birthday. It was four years, at the end of June, since the recession officially ended. But four full years of data confirm that widely held perceptions about the recovery are true; real GDP growth has been slow and the recovery has been lackluster.Freddie Mac Chief Economist Frank E. Nothaft and Deputy Chief Leonard Kiefer note that in the previous ten recessions GDP grew an average of 17.4 percent in the first four years of recovery; this time real GDP growth has been 9.0 percent, most closely resembling the downturn that began in May of 1954, a recession that double dipped.But there is good news in the housing sector with solid growth in housing starts (up 18 percent), home sales (+13 percent) and national house price indices rising around 10 percent in the last year. A rapidly improving housing market, Freddie Mac Says, will help the economic recovery in at least three ways.oIncreased demand for housing will help stimulate new single- and-multifamily construction and boost home sales The report projects housing starts to hover just below one million units (seasonally adjusted) during the first half of the year and to add approximately 3/8th of a percentage point directly to GDP growth. It will also help to employ many more people in construction and other housing-related jobs.oRising home prices should help spur consumption spending by increasing the net wealth of families. As wealth rises families typically increase consumption spending and may even tap into the equity in their homes for either consumption or investment. Freddie Mac's second quarter refinance report found that the latter might already be happening with cash-out refinancing up from a year earlier.oFinally rising home prices will spur small business formation as business owners' homes often serves as collateral to start businesses. Small business growth has been very weak, actually subtracting from net job creation from 2008 through 2011. Recent Census Bureau and University of Maryland research indicate that 42 percent of the decline in the performance of young firms relative to mature firms is due to decline in home prices.2. Builder Confidence Hits Another Benchmark, Nears 8 Year HighBuilder confidence has set another recent benchmark, hitting the highest point on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) in nearly eight years. The index, a measure of builder confidence in the market for newly constructed single-family homes rose three points in August to 59. This was the fourth consecutive monthly gain."Builders are seeing more motivated buyers walk through their doors than they have in quite some time," said NAHB Chairman Rick Judson. "What's more, firming home prices and thinning inventories of homes for sale are contributing to an increased sense of urgency among those who are in the market."3. Falling Mortgage Debt Offsets Rise in Consumer Debt In spite of a huge surge in auto loans, Americans reduced their overall household debt by $78 billion during the second quarter the Federal Reserve Bank of New York said today. Total household indebtedness fell to $11.15 trillion in the second quarter, a decrease of 0.7 percent from Quarter One and 12 percent below the peak debt of $12.68 billion reached in the third quarter of 2008.The declining debt was due in large part to a reduction in its largest component, mortgage debt, which fell $91 billion from the first quarter to $7.84 trillion. Balances of home equity lines of credit (HELOCs) declined as well, by $12 billion to $540 14 billion. Mortgage originations rose for the seventh straight quarter to a total of $589 billion.Questions about the current mortgage market? Contact Jenny Baker Today!