Freddie Mac rolled out this week it’s outlook for the U.S. Economy for 2012. Freddie Mac is predicting that our economy will grow by 2.5% during the upcoming year, and that the already record low Interest Rates will continue to stay at record low levels.
Freddie Mac is also predicting that the activity in Housing will increase, but it just at a modest rate. According to Frank Nothaft , Chief Economist for Freddie Mac “While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly,”
It looks like we are likely to close off 2011 with rates at about 4% with no points on a 30-year fixed-rate mortgage. It would be unheard of, but is it possible for Interest Rates to drop below 4%?
Nothaft also feels that the recent changes to the Home Affordable Refinance Program will increase refinance by more than $100 billion in refinanced loans. Here I am prone to disagree with Mr. Nothaft for the simple reason that many people do not have much equity in their homes, and in several cases homeowners are underwater when it comes to the present value of their homes. We will have to wait and see if the Home Affordable Refinancing Program will have an impact, but even if it does $100 billion is a very optimistic figure.
Last of all the Rental Market is predicted to continue to grow as Buyers continue to be very cautious, because of job security, and feeling that prices and Interest Rates will continue to go down.
Hopefully some of these predictions will come true, and 2012 starts to turn things around in the Real Estate Industry.
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