Monday, February 1, 2010

Mortgage Rates Steady in 2010?

Mortgage rates will stay between 5% and 6% in 2010.  Wishful thinking?  Not according to the head of Freddie Mac Charles Haldeman.

The US housing market has appeared to reach the bottom, and interest rates on 30 year mortgages will stay between 5% and 6% in 2010, were the predictions by the Mr Halderman, the  leader of Freddie Mac - the nation's second largest guarantor of residential mortgages.  

Now we know no one is able to predict the future, especially in real estate.  But we have noticed in the last year officials at the major housing institutions have been particularly cautious in making statements that can come back to haunt them, with congress and the press ready to call them on any undue optimism. So when we saw his speech to the Detroit Economic Club his assessment of the current housing market we felt a wave of encouragement, the kind we haven't felt in a while.

 "The numbers will always bounce around some, but from home sales to house prices, it appears that nationally we may at last be approaching a bottom." 

"The big downside risk to all this is a large wave of homes now in foreclosure potentially hitting the market at prices that are destructive."

Both of Haldeman's statements are cautious but reflect the data and trends of the last few months.  

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