Join        Login             Stock Quote

Freddie Mac Releases Housing Market Outlook

 December 10, 2012 02:47 PM

(By Balachander) Freddie Mac expects most U.S. house price indexes (HPI) likely rising by 2 to 3 percent in 2013 as property values to continue to strengthen.

Over the twelve months ending September, the Federal Housing Finance Agency Purchase-Only HPI was up 4.5 percent and the Freddie Mac HPI was up 4.3 percent, Freddie Mac noted. Similarly, apartment building values rose, with the National Council of Real Estate Investment Fiduciaries reporting a four-quarter rise of 6.3 percent through the third quarter.

In its U.S. Economic and Housing Market Outlook for December, Freddie Mac sees long-term mortgage rates to remain near their record lows for the first half of 2013, then rising gradually during the second half of the year.

[Related -Savings Glut and Financial Imbalances]

Freddie Mac expects long-term fixed-rate mortgage rates to remain below 4 percent, meaning homebuyer affordability should remain very high in 2013 for those potential buyers with good credit history, stable income and sufficient savings in the single-family market.

Freddie Mac said household formation should step up further to a net 1.20 to 1.25 million household increase in 2013 with housing starts up around the 1 million annualized pace by the fourth quarter of next year.

Vacancy rates for both apartments and the single-family for-sale market have been trending lower for much of the past three years, Freddie Mac noted, as household formation outpaced new construction. The firm expects this trend to continue in 2013 and could bring aggregate vacancy rates down to levels last seen a decade ago.

Freddie Mac expects refinance activity for 2013 to be less compared with 2012, saying many homeowners will have little financial incentive to refinance again and an increase in interest rates. Single-family mortgage originations is expected to decline by 15 percent.

[Related -A Dividend Aristocrat Is Now On Sale]

"The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive," said Freddie Mac chief economist Frank Nothaft. "This has been a big change from a year ago, when some analysts worried that the looming 'shadow inventory' would keep the housing sector mired in an economic depression."

"Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery," Nothaft added.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageSavings Glut and Financial Imbalances

Martin Wolf in today's Financial Times discusses the reasons for low interest rates and suggests some read on...

article imageA Dividend Aristocrat Is Now On Sale

The bear market investors have been dreading is already here for many individual stocks. While the S&P 500 read on...

article imageTwo Picks to Play Defense in a Slowing Economy

Is the economy slowing? Last Thursday the Institute for Supply Management (ISM) reported that its read on...

article imageUS Jobless Claims Fall, Moving Closer To Multi-Decade Low… Again

US jobless claims continue to cast a positive glow on the outlook for the labor market. Today’s weekly read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.