Freddie Mac expects strong spring home buying

by CHRISTINE RICCIARDI –Housingwire

 

The housing market is poised for an uptick in home sales during the traditional spring buying season, as employment improves and rates remain low, Freddie Mac said in its April 2011 economic outlook released Wednesday.

Overall, Freddie Mac said home sales will up-tick 5% in 2011 compared to 2010 — a projected 4.9 million home sales. The agency estimates that number will rise 12.2% to 5.5 million homes sales in 2012.

The Federal Reserve‘s current monetary policy and Treasury note purchase program are keeping mortgage rates low, according to Frank Nothaft, chief economist at the agency.

On a monthly comparative basis, homes sales are expected to be lower this month than April 2010, as sales last year were inflated by the first-time homebuyer tax credit, Nothaft said.

Short-term rates are especially supportive of household borrowing, Nothaft said, adding that he expects adjustable-rate mortgages to account for 7% of all 2011 sales. This is up from 5% in 2010.

Fixed-rate products will gradually increase throughout the year to an estimated 5.1%, the report said, discouraging many refinances. Refinances are expected to account for a smaller percentage of loan applications.

"Driven by low mortgage rates and home prices well below peaks, homebuyer affordability is at the highest level in at least forty years, according to the National Association of Realtors," Nothaft said. "Indeed, sales contract signings for existing homes were up in February, positioning the market for a bounce up in settlements during the second quarter, the traditional time for the seasonal upswing in sales."

Another factor motivating the home buying season is unemployment, which dropped for the fourth consecutive month in March to 8.8%, according to the U.S. Department of Labor. Compared to March 2010, employment was up by 1.3 million, the report said.

However, job growth is not expanding the real estate sector. According to an analysis by the Mortgage Bankers Association, the mortgage industry workforce decreased 51% between February 2006 and February 2011.

appraisal management, fha appraisals, appraisal management companies, fha appraisal compliance, reverse mortgage appraisals

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: