Housing Continues to Gain Ground
- Feb
- 26
By Pete Bakel
Although the economy seems to be transitioning to a slightly stronger growth path, unresolved fiscal policy decisions pose significant headwinds in early 2013, according to Fannie Mae’s Economic & Strategic Research Group. Increased taxes and reduced government spending will keep growth at a subdued pace in the first half of the year before activity picks up in the second half. Net exports also are expected to create a drag as Europe remains in recession and U.S. export growth tries to bounce back from a slowdown in late 2012.
On the more positive side, the improving performance of the housing market is expected to continue through 2013. Boosted by strengthening home prices, which may incite more potential buyers to enter the market, housing should contribute to GDP on a growing basis and help to counteract the fiscal headwinds. Other primary growth drivers will include consumer spending, manufacturing, and business capital investment.
However, consumer spending growth is likely to weaken somewhat in the first half of the year, as tax hikes take a toll on Americans’ income. Overall, economic growth is expected to come in at 2.0 percent for all of 2013, in line with average growth since the recovery began more than three years ago, assuming only part of the government sequestration will occur this year.
“The question mark surrounding potential tax increases and government spending cuts produces significant economic uncertainty,” says Fannie Mae Chief Economist Doug Duncan. “Our February forecast accounts for a modified version of sequestration unfolding in 2013, which we expect will result in less fiscal constraint – roughly a 0.2 percentage point drag. Our outlook is bolstered by the employment picture, which is trending better than previously reported, as well as the momentum in manufacturing and energy production. We also expect the housing recovery to broaden this year. However, the degree to which these drivers will serve to offset the headwinds from ongoing and forthcoming fiscal contraction is still to be determined.”
For an audio synopsis of the February 2013 Economic Outlook, listen to the podcast on the Economic & Strategic Research site at www.fanniemae.com. Visit the site to read the full February 2013 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary.
For more information, visit www.fanniemae.com.
Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907
Average 30-Year Fixed-Rate Mortgage Up Slightly
- Feb
- 26
Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates changing little over the past four weeks which is helping to spur new home construction. After being flat for three straight weeks, the 30-year fixed edged up to 3.56 percent, while the 15-year fixed remained unchanged at 2.77 percent.
The 30-year fixed-rate mortgage (FRM) averaged 3.56 percent with an average 0.8 point for the week ending February 21, 2013, up from last week when it averaged 3.53 percent. Last year at this time, the 30-year FRM averaged 3.95 percent.
The 15-year FRM this week averaged 2.77 percent with an average 0.8 point, the same as last week. A year ago at this time, the 15-year FRM averaged 3.19 percent.
Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.64 percent this week with an average 0.5 point, the same as last week. A year ago, the 5-year ARM averaged 2.80 percent.
Results showed that the 1-year Treasury-indexed ARM averaged 2.65 percent this week with an average 0.4 point, up from last week when it averaged 2.61 percent. At this time last year, the 1-year ARM averaged 2.73 percent.
"Mortgage rates have been relatively stable, hovering near record lows, for the past four weeks which is helping to spur new home construction,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “For instance, new construction on single-family houses rose to an annualized rate of 613,000 in January, the most since July 2008. In addition, single-family building permits were up to the highest issuance level since June 2008."
For more information, visit www.FreddieMac.com.
Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Southern Homes Elite
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907
Fixed-rate Mortgages Remain at or Near All-time Lows
- Mar
- 13
Freddie Mac (OTC: FMCC) recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed-rate mortgages at or near their 60-year lows helping to drive record high homebuyer affordability. The 15-year fixed, a popular choice among refinance borrowers, averaged a new all-time record low of 3.13 percent.
The survey shows that the 30-year fixed-rate mortgage (FRM) averaged 3.88 percent with an average 0.8 point for the week ending March 8, 2012, down from the previous week when it averaged 3.90 percent. Last year at this time, the 30-year FRM averaged 4.88 percent.
Additionally, the 15-year FRM averaged 3.13 percent with an average 0.8 point, down from the last week when it averaged 3.17 percent. A year ago at this time, the 15-year FRM averaged 4.15 percent.
Results showed that the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.81 percent, with an average 0.7 point, down from the last week when it averaged 2.83 percent. A year ago, the 5-year ARM averaged 3.73 percent.
The 1-year Treasury-indexed ARM averaged 2.73 percent with an average 0.6 point, up from the last week when it averaged 2.72 percent. At this time last year, the 1-year ARM averaged 3.21 percent.
"With these historically low rates and declining house prices, the typical family had more than double the income needed to purchase a median-priced home in January, according to the National Association of RREALTORS® Housing Affordability Index which registered the highest reading since records began in 1970,” says Frank Nothaft, vice president and chief economist, Freddie Mac.
“In fact, the Corelogic® National Home Price Index fell for the sixth consecutive month in January to the lowest level since January 2003. This high level of affordability likely contributed to the recent two-week rise ending March 2nd in mortgage applications for home purchases."
For more information, visit www.freddiemac.com.
Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Keller Williams Realty
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907
Housing Affordability Index Hits Record High
- Mar
- 09
Housing affordability conditions have reached the highest level since record keeping began in 1970, according to the National Association of REALTORS®.
NAR’s Housing Affordability Index rose to a record high 206.1 in January, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power.
An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent downpayment and 25 percent of gross income devoted to mortgage principal and interest payments. For first-time buyers making small downpayments, the affordability levels are relatively lower.
NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, says this latest data underscores buyer opportunities in today’s market. “This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home,” he said. “For buyers who can qualify for a mortgage, now is a very good time to become a homeowner.”
NAR projects the affordability index for all of 2012 will be at an annual high, with little movement in mortgage interest rates or home prices during the year. “Housing inventory levels have declined to a point where conditions are becoming much more balanced in much of the country,” Veissi said. “If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices with modest gains in areas with stronger job growth.”
For more information, visit www.realtor.org.
Mike Spruell
Realtor®/Broker/ePRO
The Lake Norman Homes Team
Keller Williams Realty
www.LakeNormanRealEstate.pro
866-LakeNorman
704-907-7907
