Can Housing Handle Higher Mortgage Rates?
MCLEAN, VA--(Marketwired - May 19, 2015) - Freddie Mac (
Outlook Highlights
Quote
Attributed to Len Kiefer, Deputy Chief Economist, Freddie Mac.
"While the comparison of the 2013 Taper Talk to the recent jump in rates over the past few weeks is striking in their timing and movement, not all economic conditions are the same. The labor market has added 5 million additional jobs, the unemployment rate is significantly lower and housing markets are generally in much better condition than two years ago. For the remainder of this year, we're likely to continue to see these mortgage rate swings as market participants try to anticipate Fed timing around rising short term interest rates. Unfortunately, perspective homebuyers may experience bouts of affordability shock in many housing markets. So far it's been low mortgage rates that have helped to keep homebuyer affordability strong in the face of rising house prices, while income growth remains stagnant."
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.