Looking Ahead to 2007 in Lending
Sharon Natarus January 11th, 2007
Mortgage Rates have fallen:
For 10 of the past 13 weeks mortgage rates are now averaging 6.11%, the lowest since January. Six months ago, the average rate on a 30-year fixed loan was 6.67%. The average for this year is 6.44%.
A new deduction for private mortgage premiums:
The write off is limited to 2007. It applies only to mortgage insurance issued after 2006, so current homeowners are not eligible. In addition, the deduction phases out for marrieds whose AGI’s are more than $100,000 and for singles with AGI’s over $50,000.
No change in Loan Limit:
The conforming loan limit will remain unchanged next year at $417,000. The limit is the legislatively set ceiling on the size of loans that can be purchased or guaranteed by Fannie Mae and Freddie Mac, the two government-sponsored financial home loan institutions.
Wells Fargo economists are optimistic about 2007 economic growth:
“The [stock] market’s recession fears are overblown and the U.S. economy will reveal incredible resilience in 2007,” said Dr. Scott Anderson, Senior Economist for Wells Fargo & Company, during the company’s annual economic forecast teleconference earlier this week. “The drivers that had been pulling down the U.S. consumer and economy in the first half of 2006-such as rising energy prices and interest rates, sluggish wage growth, and a sharp drop in housing demand- began to recede or stabilize in the second half of 2006.”
Anderson said most of the damage in the housing market already has occurred and there are signs of recovery-mortgage purchases are up 15 percent since the beginning of November. Existing home inventories have plateaued over the last four months, and the Wells Fargo National Association of Home Builders index has held above its September low for three consecutive months with builders reporting an improved sale outlook.
[...] See End of Year Rates Summary for more information on Lender Stats as compared with end of year ‘05 [...]