Freddie Mac sees “cautious signs” of improvement in the housing market and overall economy and expects “more warmth” in 2013, according to its latest monthly outlook.

“The US economy continues to build on the momentum from the end of last year,” said Freddie Mac VP and chief economist, Frank Nothaft. “Our outlook anticipates gradual, but steady, improvement in the economy and the housing market, supported by low interest rates and brightening job market prospects.”

Positive signs Freddie cites include job gains, declining unemployment, and high affordability.

For the past two months, job gains have surpassed market predictions, while unemployment has fallen to 8.3 percent, and according to the GSE, unemployment benefits applications are now at levels not seen since March 2008.

Another positive indicator, home prices increased 5 percent in December, and rose 1.7 percent over the year in 2011, according to the National Association of Realtors.

While Freddie points out that home prices declined in 19 of the 20 cities in S&P/Case-Shiller Home Price Indices, the GSE also notes that affordability remains high and mortgage rates low, making for a buyer-friendly market.

“At the end of 2011, a family earning the median family income had almost double the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home, according to the NAR Housing Affordability Index,” according to Freddie’s February outlook.

Amid the mostly positive indicators Freddie Mac cites, consumer outlook lost some of its positive movement over the previous two months in January. However, Freddie notes that builders were more optimistic.