Frank Nothaft, chief economist for mortgage giant Freddie Mac, is in San Diego this weekend for the American Economic Association annual meeting. He took some time Friday to talk to U-T San Diego about his national and regional predictions for housing in 2013. Here are some excerpts:
On housing activity: It began to turn around in 2012 and will continue to pick up in 2013. Housing starts nationwide were up 25 percent in 2012 from 2011. Home sales were up about 9 percent during that same time frame. Housing starts this year may rise an additional 20 percent to 25 percent and home sales may rise another 8 percent to 10 percent. Southern California also will see pickup in home prices and sales.
On mortgage rates: Mortgage rates are going to stay at a very low level, mainly due to the Federal Reserve’s decision to continue buying up large quantities of mortgage-backed securities. That pushes up the price of those securities, which reduces the yield and drives the very-low interest rates. The 30-year fixed conforming loan rate is expected to remain below 4 percent…
Read the rest of SignonSanDiego.com’s article here: “Freddie Mac economist makes ’13 housing predictions”.