- Dennis Norman
The Mortgage Bankers Association (MBA) released a report this week with a their forecast of where the economy, housing market and interest rates are headed for the balance of this year as well as next year.
While I think in these volatile times I think it is extremely difficult to make predictions with regard to our economic future I have found the MBA’s opinions to be level-headed and based on good fundamentals. Highlights from their report include:
The unemployment rate will continue to increase from the current level of 9.8 percent to about 10 percent by the end of 2009 and peak at 10.2 percent in the second quarter of 2010, before declining slowly through 2011- Fixed mortgage rates are expected to average about five percent in the fourth quarter of 2009 and increase to 5.6 percent by the end of 2010.
- Total existing home sales for 2009 will end up about two percent higher than those for 2008. Existing home sales are projected to increase further in 2010, increasing by about 11.2 percent.
- New home sales for 2009 will be down by about 18 percent relative to 2008. Sales seemed to have bottomed in the first quarter of 2009 and have been rebounding modestly since. For all of 2010, new home sales should post an increase of about 21 percent from 2009′s very low levels.
- National average home price declines should abate by early 2010, but will vary by state and home value. The demand will be highest for entry-level homes.
Overall I would say the MBA forecast sounds pretty decent, considering what we have been through and where things stand now. Clearly there are many factors that could dramatically change the numbers they are forecasting but over the coming months we’ll see how things are playing out and watch to see if the MBA adjusts their forecasts.
Jay Brinkmann, MBA’s chief economist and senior vice president for research and economics said “the recession is behind us but the effects of the recession will linger for some time in the form of higher unemployment, and lower levels of business investment and home construction. One of the big questions regarding growth will be the behavior of consumers. The large losses of consumer wealth in the form of reduced home values and stock market losses, as well as the absolute losses of income resulting from unemployment, reduced employment and the fear of unemployment have constrained consumer spending,”
Related posts:
- Home Price Forecast Predicts Further Decline Before Upswing; Bottom in March, 2010
- Current Housing Market Rivals Depression-Era Price Declines according to Zillow Report
- Foreclosure homes account for 26 percent of all 2010 sales
- Pending Home Sales Declines Again In January
- New home sales close out 2010 on the rise; predicting increased sales in 2011
San Diego new home sales have been gaining momentum. Hopefully, the forecast for a 21% increase will hold true.