5 Predictions for 2011
Posted by Michael Pannell on Saturday, December 11th, 2010 at 8:45am.Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:
1.
Low mortgage rates. With Fed observers expecting the central bank to
keep the federal funds rate at its current target range of 0 percent to
0.25 percent for most (or all) of 2011, relatively low mortgage rates
will be a feature of the 2011 mortgage market. Thirty-year fixed-rate
loans are likely to remain below 5 percent throughout the year, and
initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain
below 4 percent in 2011.
2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.
3.
Housing will remain affordable. With affordability high, many
first-time buyers will be attracted to the housing market in the New
Year, likely translating into more home sales in 2011 than in 2010.
4.
Refinances will dwindle. Many eligible borrowers have already
refinanced and the federal Making Home Affordable refinance program is
expiring on June 30. While fixed-rate loans are likely to remain low,
they will move up gradually, making it even less likely that refinances
will be attractive to most home owners.
5. Delinquency rates will
decline. Based on the last several business cycles, the share of loans
that are 90 or more days delinquent or in foreclosure proceedings —
known as the "seriously delinquent rate" — generally crests within a
year of the start of the recovery in payroll employment, and this
economic recovery appears to fit within that pattern. Payrolls began to
rise last January, and by the spring the seriously delinquent rate had
begun to fall.
Source: Freddie Mac (12/09/2010)
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Share9 Responses to "5 Predictions for 2011"
All great predictions. In our Pensacola area market it is clear we have already hit bottom and our prices are moving up as our available inventory is declining. With interest rates increasing those looking for a "bargain" may have missed the "perfect" timing. However, with rates still under 5% and prices back to year 2001 rates there are certainly still great opportunities out there! PensacolaHomes
Posted on Sunday, December 19th, 2010 at 9:14 AM.
These predictions seem pretty right on. Central Texas is already seeing an increase in activity as we approach the New Year. It is tough to tell weather or not the source (Freddie Mac) is providing these predictions from a truly "analytical" perspective. Either way, it is music to my ears.
Posted on Wednesday, December 22nd, 2010 at 4:44 AM.
If rates will stay under 5%, I'll be very happy! I must say I've gotten quite used to it. And my clients are banking on it!
Posted on Thursday, December 23rd, 2010 at 2:57 PM.
I like all the predictions above. The only thing missing is that we must have the lenders begin lending again. Many buyers are facing obstacles and surprises from the lenders. Obtaining the financing is the critical piece of the puzzle.
Posted on Sunday, December 26th, 2010 at 3:35 PM.
These predictions are what many people predict now. In my opinion, prediction 2 is actually true.
Posted on Wednesday, January 5th, 2011 at 9:05 PM.
That's nice news for Memphis if it's true! Hard to really know unless looking back retroactively, however.
Posted on Thursday, January 6th, 2011 at 2:16 PM.
Great post! The prices in Vancouver have dropped a bit but we are still seeing a lot of buyer traffic. Hopefully it continues and becomes more affordable!
Posted on Wednesday, March 9th, 2011 at 2:19 PM.
Well, we're pretty deep into 2011 by now and it seems that things are working out much to the way people predicted would happen. Seems like you were correct on many things.
Posted on Monday, August 15th, 2011 at 4:23 PM.
But can we trust Freddie as a reliable source?
Posted on Tuesday, December 14th, 2010 at 1:55 PM.