Amidst all the uncertainty in our world that rings in this new year, the only constant we can count on is — change. And we certainly have experienced lots of changes in 2011. Whatever lies ahead for this year, 2012 begins with home loan rates at historic lows, which makes it a great time to consider purchasing a home or investment property.
This week Frank Nothaft, Freddie Mac’s Chief Economist provided a glimpse of what he believes is in store for 2012 in his article Peering into 2012 where he gleaned into his crystal ball and predicted slightly better housing activity and very low mortgage rates for 2012. In particular he stated, “Mortgage rates will likely remain very low, at least through mid-2012.” Nothaft expected rates for 15- through 30-year mortgages to be around 4.0 percent or lower with rates edging up during the second half of the year.
Home sales according to Nothaft will be higher than the numbers for 2011 but a full-fledged recovery in the housing sector will likely not be on the horizon this year. It appears the rental market is currently leading the housing recovery as rents have risen in most markets including the Myrtle Beach area. It is anticipated that we will see a dearth of new apartment completions this year, pushing housing starts up slightly more than 10 percent in 2012 according to Frank Nothaft. Single-family starts will outpace last years numbers, but no significant bounce-back in single-family construction is likely in coming quarters.
In the short term we are seeing historic low rates right now. The biggest news of the week will be Friday’s Jobs Report, as the Labor Department reveals the latest unemployment figures and how many new jobs were created in December. The rule here is weak economic news causes money to flow out of stocks and bonds, helping bonds and home loan rates to improve, while strong economic news normally has the opposite result.