Economist's Commentary: August 11, 2008
Quick Take on the Economy: August 11, 2008
By Lawrence Yun, NAR Chief Economist
10-year Treasury Note
- The all important benchmark for mortgage rates, the yield on the 10-year Treasury, is right at around 4 percent today. It had been bouncing around 3.9 to 4.1 percent for the past two months.
- The 30-year mortgage rates generally move in similar steps with the 10-year Treasury yields. However, recent financial problems with Fannie and Freddie will mean a higher than normal spread. Despite these events, mortgage rates at near 6.5 percent are still at historically favorable rates.
- The decision by Fannie on Friday to pull out of the Alt-A mortgage market will knock some homebuyers and home investors out of the market.
What does today's data mean for REALTORS® and consumers?
- Mortgage rates are still attractive to those with good credit. But rates are more likely to rise than fall over the next year.
- Though some loans are more difficult to obtain, FHA mortgages - now with higher loan limits - are pretty much open for business for most U.S. homebuyers at very attractive terms.
Daily Forecast Update
- NAR's monthly official forecast as of August 7 (14K PDF)
- GDP Q3: 2.0%
- GDP Q4: 0.5%
- Unemployment rate by election time: 5.9%
- Average 30-year fixed mortgage rate in December: 6.6%
- Average 30-year fixed mortgage rate by mid-2009: 6.7%
- The next Fed policy change: a rate hike in December 2008.
This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >
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