Predictions from Realtor’s Chief Economist
Published November 19, 2010 | 
Dr. Lawrence Yun, the National Association of Realtor’s chief economist was in Denver this week and offered some insights into what he expects could happen next year: higher interest rates, flat home prices, and a rebound in home sales. His predictions below are a national forecast and not specific to Colorado which he has said in the past is a strong market compared to others in the country.
Yun expects U.S. home sales to reach 5.2 million next year, up from 4.8 million this year and matching the pace of 2000. He also thinks that more jobs in 2011 will increase home sales. His forecast calls for mortgage rates, which briefly approached 4 percent, to return to 5 percent next year and 5.9 percent in 2012 as inflationary pressures build in the economy.
Although some analysts worry about the foreclosure shadow market, Yun believes that we are entering a stable, “virtuous” housing cycle.
Posted in Advice, Buyers, Mortgages, Real Estate, Sellers | 
Housing Predictions, Housing Trends, Mortgage Rates | 
Leave a comment30-Year Mortgage Rates Inch Up
Published November 8, 2010 | Freddie Mac confirms that average interest for 30-year fixed mortgages rose for the third consecutive week, bumping up to 4.24 percent from 4.23 percent a week ago.
The average 15-year rate for the week ended Nov. 4 was 3.63 percent, a drop from 3.66 percent.
Scott Brown, chief economist at Raymond James & Associates Inc., says this week’s Federal Reserve actions “aren’t going to change the economy right away, but they should help keep mortgage rates low for quite some time.”
Source: St. Louis Post-Dispatch (11/05/10)
Bankrate: Mortgage Rates Drop to New Lows
Published October 8, 2010 | RISMEDIA, October 8, 2010—Mortgage rates fell to record lows again this week, with the average conforming 30-year fixed mortgage rate now 4.45 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.32 discount and origination points.
To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/.
According to Bankrate, the average 15-year fixed mortgage dropped to 3.87 percent, and the larger jumbo 30-year fixed rate fell to 5.14 percent. Adjustable rate mortgages also hit new lows, with the average 5-year ARM decreasing to 3.64 percent and the average 7-year ARM falling to 3.88 percent.
Mortgage rates set yet another record low in anticipation that more efforts from the Federal Reserve – known as quantitative easing – are on the way in an effort to juice the economic recovery. Investors expecting lower interest rates to result have been front-running the Fed by purchasing government- and mortgage-backed bonds, driving yields lower. Mortgage rates are dictated by yields on government- and mortgage-backed debt.
The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now at 4.45 percent, the monthly payment for the same size loan would be $1,007.44, a savings of $234 per month for a homeowner refinancing now.
SURVEY RESULTS
30-year fixed: 4.45% — down from 4.5% last week (avg. points: 0.32)
15-year fixed: 3.87% — down from 3.94% last week (avg. points: 0.30)
5/1 ARM: 3.64% — down from 3.68% last week (avg. points: 0.36)
Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
For a full analysis of this week’s move in mortgage rates, go to http://www.bankrate.com.
The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. There is no clear consensus this week, with 38 percent of panelists predicting mortgage rates will continue to rise. The remaining respondents are evenly divided, with 31 percent forecasting a decline and an equal 31 percent expecting mortgage rates to stay more or less unchanged over the next week.
For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI.