Tag Archives: forecast

Moderate Growth Projected for 2012

Overall, growth is expected to continue for the year, but at a modest rate, according to the Fannie Mae February 2012 Economic Outlook report.

Economic growth is projected to be at 2.3 percent for 2012, an increase compared to 1.6 percent last year, according to the report.

For the first time in seven years, the housing market is projected to contribute to gross domestic product (GDP), the report also stated, but by a very modest amount.

“Risks to the forecast are more balanced between the upside and downside since our January forecast,” said Fannie Mae chief economist Doug Duncan. “The economy appears to be more resilient than in previous months, and should be less vulnerable to shocks, including any spillover from the European sovereign debt crisis”…

Read the rest of this article (and photo) by DSNews.com here: “Moderate Growth Projected for 2012.”

Thirty-Year Fixed-Rate Matches All-Time Low

Fixed mortgage rates started the year at or near their all-time record lows, according to market data published by Freddie Mac Thursday.

The GSE reports the interest rate on a 30-year fixed mortgage averaged 3.91 percent (0.8 point) for the week ending January 5, 2012. That’s down from 3.95 percent the previous week and matches the record low set just two weeks earlier.

This marks the fifth consecutive week the 30-year rate has come in below the 4.00 percent mark. To put things into perspective, last year at this time, it was averaging 4.77 percent.

The 15-year fixed-rate averaged 3.23 percent (0.8 point) in Freddie Mac’s survey this week, down from 3.24 percent the week prior.

The current average rate on a home loan with a 15-year fixed term is just two basis points above its all-time low of 3.21 percent, which was hit in two weeks during the month of December. A year ago, the average 15-year rate was at 4.13 percent.

Frank Nothaft, Freddie Mac’s chief economist, attributed the declines seen among fixed rates to recent data reports which indicate the housing market and manufacturing industry are showing signs of improvement.

“Pending existing home sales in November jumped 7.3 percent, nearly five times greater than the market consensus forecast, to its strongest pace since April 2010,” Nothaft noted.

“In addition,” he said, “construction spending rose 1.2 percent in November, supported by the residential sector which exhibited its fourth consecutive monthly increase. Similarly, manufacturing expanded in December at the fastest pace in six months.”

Freddie Mac’s report shows the 5-year adjustable-rate mortgage (ARM) came in at 2.86 percent (0.7 point) this week, down from 2.88 percent. This time last year, the 5-year ARM was averaging 3.75 percent.

The GSE’s survey puts the 1-year ARM at 2.80 percent (0.6 point). It was the only loan product included in the GSE’s study to head higher, up from 2.78 percent last week. Flip the calendar back 12 months, and the 1-year ARM was averaging 3.24 percent.

This article is from DSNews.com: “Thirty-Year Fixed-Rate Matches All-Time Low.”

What’s in store for the housing market in 2012?

2011 was supposed to ratchet up steady, if not, robust growth in the US economy. However, several economic and geo-political events tripped up the economy during the year that have left would be home buyers dazed and confused about jumping into the housing market.
2011: A Year of Wild CardsLooking in the rearview mirror: 2011

Here’s what we know–2011 has been wrought with uncertainty and unexpected shocks that has hobbled output in the US and around the globe and caused a huge crisis of confidence for consumers, investors, and businesses alike. The list of wildcards is long: the DC midterm elections, the change of power in the House, the Japanese earthquake and tsunami, the Arab uprising, the oil price shocks, the European debt crisis, the battle over debt ceiling, the downgrading of the US long-term debt, and the fallout with the volatility in the stock market. All of which have left output through the first half of the year below the growth rates that accompany a recovery. The probability of a double-dip recession has gone up and has caused economists far and wide to downgrade their outlook for this year and next.

What does next year have in store for housing?

California Housing Market OutlookHere is what C.A.R. is forecasting for 2012:
  • While the probability for a double-dip recession is higher, the most likely scenario is for a continuation of the slow-moderate growth we have seen for the last few years. The outlook is for modest but positive growth with GDP coming in at 1.7% in 2011, 2.0% in 2012.
  • We are moving forward, albeit bouncing along the bottom for most of 2011 and we can expect the same for next year, with a flat sales forecast for 2011/2012 (-0.1% year-to-year loss in 2011 and 1.0% gain in 2012).
  • Prices are expected to come in 4% below 2010 levels and should show a modest gain in 2012 (+1.7% year-over-year).

Overall, we’ve seen uncertainty and a lack of urgency put a damper on the housing market in 2011.

Hopefully, 2012 will prove less uncertain and could even show signs of urgency as current prices and mortgage rates are phenomenal and will not stay this low forever.