Industry News

Freddie Mac economists see housing markets nearing floor

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Signs that housing markets are nearing a floor include stabilizing mortgage applications for home purchases, "cautiously optimistic" consumer sentiment, and a slowdown in price appreciation that will help improve affordability. That's the assessment of economists at Freddie Mac in their monthly report on the outlook for the economy and housing. Economists at the government-sponsored mortgage repurchaser warn that there "will undoubtedly be more bumps on the way" and that the "ride could be rocky in some markets." But solid economic fundamentals "should help avert a crash landing." The economy has been helped by falling energy prices, including a 25 percent reduction in gasoline prices since August. Consumer spending continues to expand at a steady pace, even though homeowners took 30 percent less equity out of their homes in the second quarter than last year. Past gains in housing prices, which give homeowners the ability to borrow money using equity in their homes, will continue to ...