January 22, 2010
By Ken Fears, Manager, Regional Economics
Daily Forecast Update
* NAR's monthly official forecast as of January 5th
* GDP 2009 Q4: +4.2%
* GDP 2010 Q1: +2.7%
* GDP 2010 Q2: +2.4%
* Unemployment rate by the mid-2010: 10.1% ↑
* Average 30-year fixed mortgage rate by mid-2010 2009: 5.6%
What does today's data mean for REALTORS® and consumers?
* Good news: mortgage rates have moderated for 2 straight weeks after leaping in early January from record lows.
* Bad news: A string of less than stellar economic news appears to have stunted Wall Street's expectations for a rapid recovery. The reality of a long, slow slog back to a stable economy is more realistic.
* While tax incentives have helped generate a boost to demand, record low mortgage rates paved the way.
* Rates have been near record lows for more than a year, but buyer confidence has only recently been restored resulting in the upward trend in sales witnessed this fall. An early and sharp increase in rates could suspend the housing recovery and cause the economy to stumble. The sour economic news is reining in equities and causing rates to fall…a good sign for a sustainable economic recovery.
Freddie Mac Weekly Mortgage Rate Survey
* The average 30-year fixed rate fell 7 basis points to 4.99% with an average of 0.7 points for the week ending January 21st.
* Rates are 8 basis points higher than their average for the same week in 2009.
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