Although we anticipate a moderation in the housing sector at some future point, with the economy picking up steam and mortgage rates still low by historical standards, the housing market will remain buoyant for at least the rest of the year.
More Quotes from Frank Nothaft:
Despite the gradual rise in mortgage rates over the last two months, housing starts were actually up in September highlighting the resiliency of the housing market. As a matter of fact, housing directly contributed to real GDP growth of 19 percent in the first quarter of the year and 23 percent in the second quarter.Frank Nothaft
There is no doubt that low mortgage rates have been the driver of this phenomenal housing market.
Frank Nothaft
With mortgage rates continuing to slip, a new wave of refinancing has appeared. According to the Mortgage Bankers Association of America, applications for refinance jumped 15 percent last week, near the record high set in March. And according to Freddie Mac's quarterly refinance review, the average age of a refinanced loan fell to 1.9 years in the first quarter of this year.
Frank Nothaft
As a matter of fact, it looks as though 1998 will register the lowest annual mortgage rates in 30 years.
Frank Nothaft
With economic news continuing to point to a growing economy, the financial markets are beginning to think about the likelihood of inflation again. Not only that, but jobs creation, retail sales, and consumer prices jumped in March which buoyed market speculation that the Federal Reserve Board will raise rates sooner than expected. Add all that to the mix and mortgage rates were bound to rise this week.
Frank Nothaft
That said, January housing starts were the highest in over 20 years, and that is based on higher rates than we are currently experiencing. All in all, the little run-up in rates that occurred this week will not be enough to cause a significant slowdown in current housing market activity.
Frank Nothaft
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