Jul 22, 2009

Freddie Mac reports we've hit bottom

Some days it seems like finding good news about the economy is on par with searching for the proverbial needle in the hay stack!

But I have some positive statistics about the housing market to share:

1. Federal Home Loan Mortgage Corporation (Freddie Mac) analysts have reported that home sales bottomed in the first three months of 2009 at an annual rate of 4.46 million per year. They expect steady gains each quarter to reach a pace of 5.85 million home sales per year by the fourth quarter of 2010.

2. In its July 2009 Economic and Housing Market Outlook, Freddie Mac states sales of both new and existing detached single-family homes are expected to bottom this year at 4.72 million -- down 37 percent from the 7.46 million transactions closed in 2005 -- before rebounding to 5.5 million next year.

3. Through May 2009, the report shows Florida has posted nine consecutive months of growth in sales, and California has posted 14 months of growth in a row. (Strength in these markets bode well for the entire nation.)

4. Rates on 30-year fixed-rate mortgages are expected to continue rising from their low of 5 percent in the second quarter of this year, reaching 5.5 percent in the final quarter of 2009 and 6 percent by the end of 2010. At 5.8 percent, however, Freddie Mac states the projected average for 30-year fixed-rate mortgages is still low by historic norms.

5. Jumbo lending appears to be staging a comeback of sorts, with major lenders once again buying the oversized mortgages from other lenders or allowing independent mortgage brokers to originate loans for them. (Any loan over the $417,000 conventional loan limit is considered a jumbo loan.)

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