Yesterday, Freddie Mac issued a press release called August 2011 U. S. Economic and Housing Market Outlook. I’ve excerpted the primary message below.
MCLEAN, Va., Aug. 16, 2011 /PRNewswire/ — Freddie Mac (OTC: FMCC) released today its U.S. Economic and Housing Market Outlook for August showing that despite the recent ups and downs in the capital markets the likelihood of an extended period of both relatively low short- and long-term interest rates is helpful news for the housing market’s recovery as it continues to struggle.
Outlook Highlights
- Employment was up 117,000, the best showing since April, and the unemployment rate edged down a tenth to 9.1 percent.
- Over the first half of 2011, growth was figured to be about 0.8 percent at an annual rate, far too weak to generate enough jobs to keep pace with labor force growth.
- Compared with the first quarter of 2008, borrowers are paying about $130 billion less in mortgage interest today, at an annual rate.
- The likelihood of an extended period of both relatively low short- and long-term interest rates is helpful news for the housing market’s recovery.
- Interest rates on 15-year fixed-rate loans – always popular for borrowers considering to refinance – reached about 3.5 percent in early August, assuring the refinance boom continues.
- Freddie Mac House Price Index(SM) for the U.S. shows that prices are down 25 percent, on average, as of June 2011 compared with their peak obtained five years ago.
©2011 PR Newswire. All Rights Reserved.
They are predicting a reasonable time frame into the future where interest rates will stay in their current range. This is great. They also confirm what we posted last week, that nationally home values have dropped about 25% since their high. This while Louisville actually gained 1.5%.
What I especially liked was seeing that employment is moving up, even if it’s only slightly. I believe that this (along with consumer confidence) needs to improve in order for the housing market to truly rebound.
The bottom line is that what’s good for the country is also good for Louisville, KY but to a lesser degree. At this point, we should welcome all the good news we can.
