|
|
|
| Interest
Rates
|
Change |
%
|
 |
2YR |
-0.02
|
3.53%
|
|
30YR |
-0.02
|
5.70%
|
|
Fed
Funds |
0.06
|
1.75%
|
|
Prime |
0
|
4.75%
|
|
3MLibor |
0.04
|
2.00%
|
|
Mortgage Rates
|
Curr.
|
6
Month
|
| |
15
year |
5.92
|
6.01
|
| |
30
year |
6.45
|
6.41
|
| |
1
year ARM |
4.82
|
5.45
|
|
|
|
|
| Monthly
Update |
 |
| |
August Economic and Mortgage Market Development
- The
economy has lost momentum over the past month (other than for
housing and autos), but we don't expect a "double-dip."
- New
home sales have risen to record levels, while existing sales remain
strong (although they fell, surprisingly, in June). Leading indicators
of housing activity suggest sustained robust sales.
- Long-term
interest rates have fallen to their lowest levels since the mid-1960s.
In addition, financial markets now expect the Federal Reserve
to ease again later this year.
- Mortgage
market activity rose to a record level in early August in response
to low mortgage rates and a growing economy. Separately, the FHFB
reported that home prices rose by 9.4 percent over the 12 months
ending in June.
- Inflation
continues to be well contained, as a result of strong productivity
growth and slack in the economy.
- Economic
growth should stay subdued in the second half of the year, climbing
modestly to around 2.5-3.0 percent. Significant stimulus already
in the economy is projected to bring growth up to around 3.6 percent
in 2003.
- Interest
rates should stay low throughout the rest of 2002, although our
best guess is that long-term rates may edge up slightly. No change
in Fed policy is expected, but additional economic weakness or
financial hiccups would likely lead them to ease again.
- Originations
are projected to climb to an all-time high of $2.2 trillion. MDO
growth of nearly 10.0 percent is likely with record home sales,
robust home price gains, and strong cash-out refis.
|
David
W. Berson
Chief Economist
Fannie Mae |
|
|
 |
|
Weekly
Forecast |
|
