Mortgage rates remain low by historical standards, but they’re rising. From a low of 5.45 percent in March, rates spurted up almost one percentage point in April to 6.3 percent. And trend lines point to continued upward movement through much of this year.
Federal Reserve Chairman Alan Greenspan trained his spotlight on the two secondary mortgage market giants, Fannie Mae and Freddie Mac. It’s not clear how much of a favor he was doing lawmakers—or the country.
For real estate, that most local of industries, the impact of offshoring is being felt largely in mortgage lending. But the next target may be the increasingly automated transaction management process that’s largely the domain of real estate brokers, independent contractors, and title companies.
What happens when the effects of the tax cuts and federal spending—which have swollen the budget deficit—and the Fed’s policy wear off? What price will the economy pay for the federal government’s profligacy?
The economy is growing, mortgage rates remain low, and demographic trends continue to be favorable as baby boomers and immigrants purchase homes in strong numbers. So look for housing to remain solid for 2004. But let’s be prudent planners and keep our eyes on four economic trends.