WASHINGTON (MNI) – The following is the text of the statement by Freddie
Mac Tuesday with highlights from its October economic and housing market
outlook:
Freddie Mac released today its U.S. Economic and
Housing Market Outlook for October showing the expansion of the Federal
Reserve’s Maturity Extension Program is sparking a further pick-up in
housing activity. Therefore, Freddie Mac is revisiting its economic and
housing market projections for the remainder of this year and for 2013.
Outlook Highlights
– Housing contributed 0.3 percentage points to the first-half 2012
real GDP growth of 1.7 percent (annualized) and will likely add a
similar boost during the second half of the year after being a net drag
on GDP from 2006-2010.
– Projecting 7 million borrowers refinancing in 2012 resulting in
an aggregate of $15 billion in mortgage payment savings over the first
12 months after the refinance, a substantial infusion of funds to help
strengthen savings and consumption spending by owners.
– Expecting single-family origination volume to come in close to $2
trillion in 2012, about a 30-percent rise from 2011, and then drop by 15
to 20 percent in 2013 as refinance ‘burnout’ and somewhat higher
mortgage rates during the latter half of next year lead to less
refinance activity.
– Anticipate a favorable interest-rate environment to remain
through the end of this year and into next with the 30-year fixed-rate
mortgage averaging around 3.50 percent.
Quotes
Attributed to Frank Nothaft, Freddie Mac, vice president and chief
economist.
“The housing sector’s performance since the Great Recession has
been unlike any other recovery over the last 65 years. However, now
we’re seeing housing resuming its traditional role of leading the
recovery charge and once again being the bright spot in the economy.
With QE3 in motion we should see even more pick-up in housing activity
thereby providing greater benefits to the overall economy and consumers
looking to refinance or purchase a home.”
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