Back Home2011 Housing Market: Reputable Sources – Differing Opinions
Ten reputable sources offer slightly differing opinions on mortgage rates and housing prices in 2011.
What will happen with the real estate market in 2011? Many predictions are being thrown about but smart buyers and sellers need to consider the sources of these predictions before taking them too seriously. Here you’ll find the 2011 real estate predictions from ten leading resources.
Predictions on Mortgage Rates in 2011
1.Bloomberg Television: In a Bloomberg Television appearance, Harvard University’s Joint Center for Housing Director Nicolas Retsinas predicted that mortgage rates won’t increase in 2011 but once they do start to go up they may increase quickly.
2.Freddie Mac: Mortgage enterprise Freddie Mac predicts that mortgage rates will climb slightly in 2011 but should remain below 5% for 30-year fixed mortgage loans through the end of the year.
3.Mortgage Bankers Association: This mortgage association agrees with predictions that mortgage rates will remain low but will start to climb. They do, however, think that rates may exceed the 5% rate that Freddie Mac predicts before the year is up.
Predictions on Housing Prices in 2011
1.Forbes: A report from leading news source Forbes predicts that home prices may fall another 20% in 2011 before a nationwide housing bottom is reached.
2.Moody’s Analytics: Chief Moody’s Analytics Economist Mark Zandi says that home prices will continue to decline but not as sharply as Forbes suggests. He predicts approximately an 8% decline through the third quarter of 2011.
3.National Association of Business Economic: Economists surveyed by NABE believe that the starting price of homes that sell will start to increase slightly in 2011 although they will remain fairly low. They believe that home prices have already hit bottom in most of the United States.
4.The Wall Street Journal: Writing for the Wall Street Journal, Nick Timiraos reports that economists and housing analysts predicts that home prices will reach their bottom in 2011 but that the housing market won’t start to recover until sometime the following year. He notes that, the housing market is faring better in several metro areas, particularly those with decent job growth such as parts of Texas and Washington, D.C.
5.TIME Magazine: An article in TIME reiterates the same predictions made in The Wall Street Journal although they say that recovery may not happen until as late as 2013. The article says that the housing bottom may not have been reached quite yet but that it’s almost there.
6.Warren Buffet for Berkshire Hathaway: Early in the year billionaire investor Warren Buffet wrote a letter predicting that the housing market woes would be behind us by 2011. He may have spoken too soon according to some of these other sources.
7.Zillow: Chief Economist Stan Humphries agrees with TIME and the Wall Street Journal regarding the impending bottom of the housing market. He notes that the rebound will be slow although he doesn’t offer a prediction for a specific date when the real estate market will be back on track.
Summary of 2011 Real Estate Predictions
Based on these ten credible resources, the following general predictions can be made:
– Mortgage rates are going to remain low. However, it’s tough to tell when they’ll start to climb and how quickly they may climb. For that reason, it may be smart to try to secure a mortgage near the beginning of 2011 rather than waiting until the end of the year.
– Home prices are going to decline in 2011. This seems fairly clear. However, it is much less clear how much they will decline or when they will stop declining and bottom out. Although some sources predict drops as high as 20%, it is much more likely that the drop will be small. Housing bottoms may even have been reached in some urban areas.
– Because mortgage rates will remain low and home prices are at or near their bottom, 2011 is a good time to invest in real estate if you have the means to do so.
Kim N. Bregman