This week’s big news items on the housing industry are Freddie Mac’s December 2012 Economic and Housing Outlook and Fannie Mae’s National Housing survey.
The key positive points from the Freddie Mac’s outlook are the predictions for low mortgage rates, increased house prices and lower vacancy rates. Mortgage rates are expected to remain below 4% through 2013. House prices are expected to strengthen by 2 to 3 percent and vacancy rates are expected to drop to 2002-2003 levels with new household formation outpacing new construction.
Fannie Mae’s National Housing Survey highlights increased confidence of Americans in the housing sector. The survey indicates consumers’ positive outlook for owning and renting a home, about their own personal finances and improved confidence in getting a mortgage loan.
CoreLogic, the real estate research firm based in Irvine reported that the rental income on residential properties increased by 24% in September compared to last year. Rental properties have become more affordable to investors, and the rental demand will remain strong through the next year.
The Federal Reserve announced that the mortgage rates will remain low as long as inflation is at or below 2.5%, and the unemployment rate is above 6.5%. The number of mortgage applications rose by 9% last week on a year-over-year basis.
On the overall US Economy, the unemployment rate dropped to 7.7% with 146,000 jobs added last month. The weekly unemployment claims dropped by 29,000 to 343,000.