U.S. home sales will increase 5% in 2011 from 2010, with share of adjustable-rate mortgage loans rising to 7% from 5% due to higher interest rates: Freddie Mac
April 13, 2011
– Freddie Mac (OTC: FMCC) released today its U.S. Economic and Housing Market Outlook for April showing signs of a pick up in home sales beginning this spring driven by the recent encouraging employment reports, low mortgage rates and continued high homebuyer affordability.
Unemployment declined for the fourth straight month to 8.8 percent, and net employment increased by 216,000 jobs.
A projected 5 percent increase in 2011 home sales over 2010, on a calendar year basis.
Despite weak and inconsistent monthly job gains for the real estate sector, real estate employment was up by 10,000 jobs since last November.
Refinancing is likely to account for a much smaller share of loan applications later this year as borrowers who are "in-the-money" decrease and mortgage rates begin inching up.
The share of adjustable-rate mortgages loans is projected to be 7 percent in 2011, compared to the 5 percent 2010 average in part because the level of fixed-rate mortgages rates are expected to rise relative to short-term interest rates.
Click here to view the complete April 2011 U.S. Economic and Housing Market Outlook [PDF]. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.
Attributed to Frank Nothaft, Freddie Mac, vice president and chief economist.
"Expect to see a bit of spring in homes sales activity during the second quarter. Sales contract signings for existing homes were up in February, positioning the market for a bounce up going into the traditional homebuying season."
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Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
SOURCE Freddie Mac
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