at Freddie Mac, is confident of a continued housing recovery
despite rising mortgage rates
After roughly a year where mortgage rates were dipping
to record low levels that seemingly would never end, they have
slowly begun to rise back to more expected numbers. Even with that
taken into account, it is absolutely no time to panic for
prospective buyers. The rates, which are not expected to skyrocket
much further, are still far below any levels that they have been at
over recent years.
This is all derived from Ben Bernankes suggested
tapering of mortgage-backed securities purchases to happen in the
not so distant future. While this fate may eventually be
inevitable, Frank Nothaft, the Chief Economist at Freddie Mac, is
confident that the housing recovery will continue to thrive despite
the rising rates, “Demand is strong, supply is limited, and for
most families in most markets, housing affordability is still
strong. But we do expect a substantial change in single-family
originations as we transition from a refinance-dominated market to
a much smaller purchase-money market by year-end.
What Nothaft calls taper talk is that the Fed will soon taper
its acquisition of mortgage-backed securities. Although this notion
has caused a great deal of uproar for some, Nothaft and other
experts are not worried in the slightest. These mortgage-backed
securities, also causally referenced to as the punch bowl, will not
be going anywhere too soon where it is seen as unexpected, as
Nothaft concluded, “So for those who like the punch bowl analogy
around tapering, theres plenty of time to drink, but do us all a
favor and drink responsibly, so the housing market can avoid the
roller coaster ride with mortgage rates.
More Information: Housing Wire