Freddie Mac today released its U.S. Economic and Housing Market Outlook for July, summarizing the first six months of the year and issuing an outlook of expectations for the second half of 2013. FMCC, which compiles data on major economic, housing and mortgage market indicators and offers forecasts based on those indicators, says it’s too soon to know how rising mortgage rates will affect the broader economy.
“The housing recovery keeps chugging along despite the recent market hysterics around Taper Talk which caused mortgage rates to jump over the past month,” Frank Nothaft, FMCC vice president and chief economist, stated in the press release. “We won’t know the immediate impact on the pop in mortgage rates for another couple months. However, we don’t expect them to stall the housing recovery because demand is strong, supply is limited and housing affordability remains strong in most markets for most families.”
FMCC released the following outlook highlights:
• The labor market added 1.2 million net new jobs through June, marking the best first half of the year since 2005 with construction contributing 100,000. Expect this same pace to continue in the second half.
• Seasonally adjusted, single-family house prices were likely up about 5 percent in national indexes in just the first half of 2013. The blistering pace in house prices is unlikely to continue, but rather moderate and grow at a rate closer to 3 to 4 percent in the second half, for a total gain of 8 to 9 percent for the calendar year.
• Through May, home sales were on their best first-half year pace since 2007. Existing home sales were up over 10 percent compared with the first five months of 2012, and new home sales were up 29 percent. In the second half of the year, expect sales (new and existing) to be up an additional 2 percent and starts up 12 percent relative to the first half.
• In the first quarter of 2013 about 65 percent of newly completed apartments were rented, up substantially from 2009 when absorption rates were about 50 percent. Good fundamentals have driven the renaissance in apartment construction: Through the first five months of 2013 multifamily housing starts were near a 300,000 annual pace, about the same as the average pace during 1997-2006.
• Recent Taper Talk has led to a jump in interest rates with the 30-year fixed-rate mortgage up a full percentage point since mid-May. Expect rates to gradually move higher, ending the year around 4.6 to 4.7 percent.
For more information, visit www.FreddieMac.com
About MissionIR
MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website
http://www.missionir.com/disclaimer.html
