Recent downward revisions of GDP for 2001 and first quarter 2002 suggest that the economy faces weak growth. This led to anticipation that the Fed will reduce overnight interest rates by the end of the year, if not sooner. That expectation, in turn, has created a boon for potential and existing homeowners in the form of lower mortgage rates.
More Quotes from Frank Nothaft:
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.Frank Nothaft
One reason why homeowners may be willing to increase the mortgage rate on their first-lien mortgage is because interest rates on most home-equity lines of credit have been pushed up again as the Fed increased short-term interest rates in January and March, which in turn pushed up the prime rate.
Frank Nothaft
The Producer Price Index (PPI) figures released today show an overall increase of 0.6 percent, but the core rose only a very modest 0.1 percent, indicating the actual rate of inflation is still very low, ... This good news points to a continuation of current affordable mortgage rates in the coming months.
Frank Nothaft
Mortgage rates have held at record low levels thereby reducing mortgage payments and making home buying affordable for a great number of families, ... Low rates have also kept the refinance market bustling and the reduced interest rate on mortgages gave homeowners about 100 more per month to spend or save.
Frank Nothaft
We estimate that home equity extraction from the refinancing of prime first mortgage liens will result in an extraction of 243 billion in 2005. However, equity extraction in 2006 will likely fall sharply, by a little more than half to about 117 billion, as we expect lower refinance activity and slower house-price appreciation.
Frank Nothaft
The market was disappointed on the news of lower consumer confidence and lower orders for durable goods,
Frank Nothaft
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