2013 Housing Prediction from Freddie Mac

by Yvette Betancourt

Here it is! Straight from Freddie Mac's Frank Nothaft, chief economic's for Freddie Mac!  So what does he predict for 2013 housing ?

Housing Activities

The turnaround was in 2013 and 2013 will continue to pick up. Nationwide, home sales were up 9% in 2012 from 2011.   Frank Nothaft predicts housing prices could rise an additional 20 percent and home sales rise another 8% to 10%.  Great News for Southern California as he see a pickup in home prices and sales. 

Mortgage Rates

Rates will stay very low due to the Fed's decision to continue buying up large quantities of mortgage-backed securities.  The 20 year fixed conforming loan rate is expected to remain below 4%.

Distressed Levels

 Foreclosure reamin at high levels but the "shadow inventory" has come down during the past two years.  There is still 3 million homes that are in serious delinquent. Bank Owned home supply will be limited in 2013.

Progress of Recovery

The Fed recognized that the housing market has been lagging and they introduce Operation Twist and dedicated to push mortgage rates to record-low levels.  

Sounds like a 2012 housing year with increase in sale prices and sales.  Sounds like a great time to buy and take advance of the low interest rates.  Perhaps time to sell and get top dollar for your property. 

Decrease of Foreclosure Homes in California During the Month of October

During the month of October, foreclosure cancellation has rose 62.1 percent and 36.7 percent since October 2011. That is a pretty big increase!

It seems that the Homeowner Bill of Rights legislation that will go into effect on Jan 1, 2013 is responsible for the new change.  Under the bill, there will be a restriction on dual-tracking of foreclosures.  

Dual-tracking is the term applied to loans that are being considered for either a short sale or loan modification, while proceeding through the foreclosure process at the same time.  Prior to Jan 1, lenders have to cancel any foreclosure on a loan that a short sale has been approved or a loan modification is being considered.  

Foreclosures aren't the only decrease during the month of October, but Notice of Defaults declined 8 percent in California and 48.9 percent decrease since last year.  

Source: ForeclosureRadar.com

Home Vacancy Rate Falls As Housing Demand Improves

According to the U.S. home vacancy rate, the measure of properties empty and for sale, fell to the lowest level since 2006 as demand for housing improved and lenders slowed property possessions.  


The inventory of available homes is dwindling and growing investor purchasing forclosures and distressed properties have increased this year.  In return, investors are turning out new houses to meet demand from traditional buyers who are being crowded out by cash-paying investors.  


Vacancy decline means that builders have a good reason to start up construction.  Since 2009, many people moved back in with their parents.  This created a sharp drop in building new homes.  


Source: Bloomberg.com

46 Months to Clear Distressed Housing Supply According to S&P

Based on the first-quater 2012 data, Standard & Poor's Rating Services predicts that it will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory.  For those of you who are bad with math, about 2 years! 


Distressed homes can be defined as all outstanding properties on which the mortgage payments are 90 or more days delinquent, properties in foreclosure, and properties that are REO. 


More news that the market is stabilizing and has began to recovery.......


To read this great article by Carrie Bay of DCNews.com, click here.