Freddie Mac’s predictions for 2011

REALTOR® Mag reports five bold predictions for 2011 offered by Freddie Mac analysts.  Among the predictions: prices have hit bottom; delinquency rates will decline; and mortgage rates will remain below five percent. See the blurb here: 5 Predictions for 2011

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11 Responses to Freddie Mac’s predictions for 2011

  1. Avatar smarten says:

    FWIW, I find the mortgage interest rate prediction to be overly optimistic.

    Mortgage rates have taken a tremendous beating in the last two weeks.

    One of the mortgage sites I follow observes that the BEST 30 year conforming fixed rate mortgage available today is at 4.75% and some origination fees [ http://www.mortgagenewsdaily.com/consumer_rates/187685.aspx ]. Below 5% but certainly not by much and we still have over a year to go!

    I guess if one of the five big predictions is suspect, the other 4 are probably as well. FWIW.

  2. Avatar Reno Ignoramus says:

    I agree. The bond market is starting to sniff some inflation and yields have risen markedly in the past 3 weeks. Mortgage rates are inextricably tied to bond yields. We may see 5% mortgages well before the end of 2011.

  3. Avatar Tom Joad says:

    If the bond market gets a strong enough sniff of inflation, we may see 6% mortgages before the end of 2011. The bond market can turn ugly every bit as fast as the stock market.

  4. Avatar MikeZ says:

    1. Low mortgage rates.

    Agreed. But I also think 6% falls under low. I’ve had ~8 mortgages, all first/fixed/30yr, none were below 6%. I paid points to buy my first mortgage down … to 9%! That was a very good rate at the time (mid-1980s).

    2. Prices have hit bottom.

    I think we’re within a few percent of bottom, both here in Reno/Sparks and nationwide, unless the economy turns back downward, then all bets are off.

    3. Housing will remain affordable.

    Oh, definitely, but qualified buyers will remain relatively scarce. Deposits and FICO scores are serious obstacles to entry, even for first-timers.

    4. Refinances will dwindle.

    I tend to agree because 1) there’s been a large volume of refinancing lately, 2) refinance volume depends largely on interest rates and 3) it doesn’t seem like rates can go much lower!

    5. Delinquency rates will decline.

    Maybe. Maybe not. Flip a coin.

  5. Avatar Tom Joad says:

    I agree that by all historical standards a 6% mortgage is very cheap. I am just suggesting that once the bond market decides inflation is in the future, it is enitirely possible to see yields rise by more than 1.5 points in a fairly short period of time.

  6. Avatar GratefulD_420 says:

    MikeZ… still doesn’t get it….still pandering to his own interest.
    “Prices have hit bottom.”
    I am making the guess that by “prices” you mean value?
    Open your eyes… values continue to drop daily as they have continuously for the last year. The drop in Values is actually accelerating again with so many downward pressures. Foreclosure, Short Sales, High Inventory, Unemployment…. really sad stuff that has a REAL negative effect on value. Not even close to stable.

    Your opinion actually truly reflects the market….. as poor and in quick decline. Please do not turn this into some Median Sales Price argument…. becuase we have already been through that. Just stop posting such B.S..

    Besides NRES (who pays cash at the courthouse steps & takes advantages of banks mispricing or easily fixed home neglect) & a few other investors… there is very few clearing any equity in their home as the values continue to decline. Even as some of those standard buyers find a “good deal” each subsequent comp takes them lower and lower in value.

    We are in for another VERY bad year and none of the drivers have been eased & with the interest rates headed up…. that just means more pressure. Foreclosure and under water short sellers….have not been worked through. Employment has NOT improved in Reno. Inventory is REALLY high for market size. Lack of qualified buyers under the current standards. It is…. and will continue to be bad.

  7. Avatar MikeZ says:

    MikeZ… still doesn’t get it….still pandering to his own interest.

    Uhhh …. excuse me? What are “my own interests,” to which I’m pandering?

  8. Avatar nevhomeowner says:

    Yeah but Zillow says my house “value” went up $9000 in the last 30 days. Zillow says I’ve reached bottom. I just made $9000. Yipee

  9. Avatar Waldo says:

    Looks like RI’s suggestion that we may see 5% mortgages well before the end of 2011 may come true before we even get to 2011. Most lenders today at 4.875% with APR close to 5%.

  10. Avatar Chartered says:

    Guy, is this prediction from the same Freddie Mac that got neck deep in hundreds of billions of dollars in subprime mortgages but said they were safe and worthy of their AAA ratings?
    The same Freddie Mac that had to nationalized?
    Is it that Freddie Mac?
    If so, why do you believe it to be credible?

  11. Lets hope all those predictions come true. Sounds very optimistic.

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