Freddie Mac expects favorable mortgage rates through 2012
Expects low mortgage rates to persist
Mortgage rates should remain in a favorable environment at least through the end of 2012, Freddie Mac forecasted in a recent report.
Freddie Mac’s U.S. Economic and Housing Market Outlook, released last week, predicted that mortgage rates, which have been at or near historical lows through much of the year, should continue on that path through the end of the year.
Rising fuel prices, Freddie Mac said, should have little effect, as consumers have been counteracting the rise with better efficiency.
According to Freddie Mac, homes built from 2000 on have shown to save 30 percent on fuel costs when compared homes built before 1960.
“A fuel-price spike doesn’t pack the same punch it once used to in part because of more efficient use of energy,” Frank Nothaft, vice president and chief economist at Freddie Mac, said in a statement.
Other economic factors are at play with the current low levels as well, the report noted.
Nothaft continued: “And with core inflation largely in-check, and below 2.0 percent, the Federal Reserve has been able to extend its Maturity Extension Program through year-end, thus keeping long-term interest rates, such as 30-year fixed-rate mortgages, at extremely low levels.”
Housing market showing positive signs
This most recent Outlook also highlighted other trends in the housing market over the first seven months of 2012.
Home sales are up 8 percent year-over-year in that seven-month span, while new home construction is up 19 percent in the same time frame.