Chief economist for Freddie Mac, Frank Nothaft, is optimistic that the housing market and the economy will improve in the second half of the year.
Nothaft predicts that mortgage rates will remain at historical lows of between 4.5 and 5 percent for the remainder of 2011. That being said, he also expects more buyers to stop waiting on the sidelines as recent price drops in home prices have improved affordability.
Some potential buyers are apprehensive to purchase until they have clear signs of an improved market and economy. Nothaft says that these buyers should be getting their signs in the second half of the year, with protected job gains, and a growing, improved economy.
“Even though near-term concerns over income and sales growth are restraining consumer spending, business hiring, and new building, a number of positive signs in the economy indicate that growth will continue and is likely to accelerate in the second half of this year,” Nothaft said. “Look for a gradual improvement in housing activity in the coming year.”