According to the Mortgage Bankers’ Association economists existing-home sales, which are expected to be about 8 percent lower this year than last, are expected to grow by less than 2 percent next year before increasing by 16 percent in 2012.
New-home sales, which will probably drop 13 percent this year from last, are expected to bottom out in the third quarter of this year and grow by 20 percent in 2011 and 40 percent in 2012.
Mortgage rates are probably headed up, but may still be below 6 percent in two years, the forecast said. MBA economists expect fixed-rate mortgages to average about 4.4 percent in the fourth quarter of this year, increasing to 5.1 percent by the end of 2011 and reaching 5.7 percent in 2012.
Have a wonderful week! Mahalo Nui Loa,
The Smith Team
P.S. In discussion with a client this morning, he reminded us of Warren Buffet’s philosophy. He doesn’t try to buy at the bottom. He buys on the way down. Likewise, he isn’t greedy and sells on the way up. Here are more Buffet witticisms. How do we relate this to real estate? Well, we can’t say it is the bottom, but we do feel it is a good time to buy. He also said, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”