Last week, Freddie Mac released their U.S. Economic and Housing Market Outlook for January that is based on several leading economic indicators. Their overall conclusion? Things are looking good.
Here are the major bullet points from the Freddie Mac Newsroom article:
Outlook Highlights and First Quarter Projections
- December’s unemployment rate of 6.7 percent remains stubbornly high. It may take another two years until labor market gets back to full employment.
- Mortgage delinquency rates at 5.88 percent have been nearly cut in half from their peak, but they are still very high from their long term normal average of approximately 2 percent.
- From 1999-2006, mortgage payments on a hypothetical 30-year fixed-rate mortgage would have increased by 50 percent more than income growth. Currently, payment-to-income ratios are only 60 percent of the level we had in 1999 suggesting room for continued house price growth.
- When measured against the single-family housing stock, historically home sales have averaged about 6 percent of the stock at an annual rate. During the housing boom, home sales increased up to about 9 and then plummeted down to around 4 percent. With home sales at a 5.8 million pace in 2014 this rate should rise up to 5.7% for 2014.
Watch this short video Freddie Mac put together that summarizes the key points: