Economist's Commentary: August 25, 2008
Quick Take on the Economy: August 25, 2008
By Lawrence Yun, NAR Chief Economist
Existing Home Sales
- Existing home sales increased in July. Interestingly, inventory rose despite the rise in sales.
- More detail here.
10-year Treasury
- The yield in the 10-year Treasury fell to 3.8 percent. Aside from a few days in mid July, it is the lowest level in 3 months. Mortgage rates on the 30-year fixed generally follow this trend, so the low Treasury yield is providing a window to lock in rates before they inch higher.
What does today's data mean for REALTORS® and consumers?
- Some buyers are taking advantage of low home prices. There is still plenty of inventory to choose from.
- Lower Treasury rates will translate into low mortgage rates - even if briefly. But the Federal Reserve will likely start raising its short-term rates from December on.
Daily Forecast Update
- NAR's monthly official forecast as of August 7 (14K PDF)
- GDP Q3: 1.8%
- GDP Q4: 0.5%
- Unemployment rate by election time: 5.9%
- Average 30-year fixed mortgage rate in December: 6.7%
- Average 30-year fixed mortgage rate by mid-2009: 6.8%
- 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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