Freddie Mac expects low rates through mid-2012

Mortgage rates will likely remain very low, at least through mid-2012, according to Freddie Mac. Rates on 30-year conforming mortgages have hovered around 4.0% or lower for the past quarter. Freddie Mac also said in its outlook forecast that housing activity will be better in 2012, but not robust.

Looking at the macroeconomic picture, Freddie expects stronger growth, in the range of 2.5% in 2012. “While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly,” commented Frank Nothaft, Freddie Mac’s chief economist.

There is still a glut of existing homes in large parts of the country that we all knew about but were only recently “discovered” after the disclosure of improperly calculated data released to the media by those hoping for a more positive spin on the housing calamity.

Many of these homes were slapped together by inferior contractors using inferior products competing for what they believed to be an endless stream of buyers during the housing boom and are showing excessive amounts of deterioration today … while older foreclosures have been shut up for several months/years with no utilities and allowed to serve as “green houses” over the summer, getting more uninhabitable by the hour.

Almost all of these homes … at their reduced prices … are still selling for twice what they are worth and prices will fall even more before they begin to be sold — that is, those that are sold and are not torn down by the banks that are stuck with them.

The only thing that is dumber than buying a home in this market, IMO, is buying a home without a home inspection conducted by an inspector who is not referred by or connected, in any manner, with anyone who will benefit from the sale.

Good post.

Even good homes eventually fall apart.

Man, I love the inspection business. They can’t download us, outsource us, or replace us with robots… and everything you see keeps deteriorating.