One thing is certain and constant in the field of forecasting changes in housing or other real estate: Economists always reserve the right to change their minds. And they often do.
This month (June) marks 43 years of writing this column about real estate news and trends. It’s been a challenge to keep track of the latest forecasts of credible economists.
For example, economic growth is expected to moderate for the rest of the year, but housing is one sector that is expected to post solid gains, according to Fannie Mae’s newly released report from its Economic and Strategic Research Group.
Economists with mortgage giant Freddie Mac also released a report revising housing forecasts upward for the remainder of the year. Economists expect that with tight for-sale inventories home prices will rise 4.5 percent this year, revised up from 4 percent in a prior report, it was noted.
Fannie Mae economists note that mortgage applications for home purchases – a gauge of home sales – have moved up consistently for the past couple of months.
“While refinance applications have recently pulled back, the actual volume of both purchase and refinance originations earlier in the year came in stronger than we had projected,” says Doug Duncan, Fannie Mae’s chief economist. As such, Fannie Mae economists have raised their mortgage origination forecast to $1.46 trillion for this year.
“We are seeing positive developments in the housing space, supporting our forecast of moderate but broad-based improvement in 2015 compared to last year,” Duncan said as quoted in a report by the National Association of Realtors.
Q: Are mortgage interest rates still rising?
A: On June 4, Freddie Mac released the results of its Primary Mortgage Market Survey, showing average fixed mortgage rates remaining near their highest level of the year before bond yields began moving even higher.
Thirty-year fixed-rate mortgages (FRM) averaged 3.87 percent with an average 0.6 point for the week ending June 4, 2015, unchanged from last week. A year ago at this time, the 30-year FRM averaged 4.14 percent.
The 15-year FRM this week averaged 3.08 percent with an average 0.5 point, down from last week when it averaged 3.11 percent. A year ago at this time, the 15-year FRM averaged 3.23 percent.
Q: What is the first step a home buyer should take in preparing to purchase a home?
A: One of the first concerns is to know your credit score. A new survey finds that house hunters who know their credit scores feel significantly more prepared to buy a home.
Yet, just half of recent buyers say they checked their credit as soon as they considered purchasing a home, according to a survey, commissioned by Experian, of 250 recent and 250 future home buyers.
“No one likes to go into a lender’s office, whether buying or refinancing, and not know the state of their credit; it makes them feel helpless,” says Becky Frost, senior manager of consumer education at Experian Consumer Services.
“Our survey shows when people interact with their credit by tracking it and learning more about the factors that affect it, they feel more confident about their purchase power.”
Q: How are Realtors doing in today’s housing market?
A: Things are a bit slow for Realtors. After gradually climbing for three consecutive years, the decline in existing-home sales in 2014 resulted in a slight reduction in Realtor business activity and income last year, according to the 2015 National Association of Realtors Member Profile.
The survey also found that Realtors are increasingly more comfortable using multiple communication channels, including social media, to connect and interact with their clients.
The survey’s results are representative of the nation’s Realtors; members of NAR account for about half of the approximately 2 million active real estate licensees in the U.S. Many non-member licensees are inactive or part time.
WOODARD has been writing about real estate news and trends since 1971 and is the resident storyteller at the Ronald Reagan Presidential Library in Simi Valley, Calif.