“We are keeping a very close eye on the effect of rising mortgage rates on the housing market and the economy, but our July forecast is little changed from last month,” said Fannie Mae Chief Economist Doug Duncan. Fannie Mae does not fear the increase in mortgage rates and feels that the housing market is going to continue to grow. People will always need to buy homes, so a rate increase will not deter many homebuyers. We are always writing mortgage loans.
With the latest jobs report showing job creation still on the rise and consumer confidence leading the climb, we should see the housing market continue to grow and thrive. “We continue to see growth in housing, partly due to an increase in existing home sales as buyers choose to act while rates remain near historic lows,” Fannie Mae Chief Economist Doug Duncan said. “Consumer attitudes are improving amid a strengthening employment sector and we should begin to see a moderate pickup in consumer spending.”
Even with the increase in mortgage rates, we are still seeing great rates. Fannie Mae did make note of the fact that even with mortgage rates increasing we are still seeing a steady flow of mortgage applications, however we are seeing a significant slow down in refinances. This is to be expected and the number to homes being built and coming on the market is still increasing.
All of these factors are pushing home values forward and it truly looks like we are seeing the light at the end of this tunnel. FNMA is expecting economic growth of 2% this year and for that to continue to increase in the coming year.
For any questions or comments, please contact me at Ingrid.Quinn@cobaltmortgage.com or visit my websites http://www.cobaltmortgage.com/ingridquinn or http://www.scottsdalemortgageexpert.com.