Housing maintains 'bellwether' status
September 13, 2002
Record low interest rates drive car, home sales
Inman News Features
Economic growth appears to have accelerated in the third quarter due in large part to low consumer interest rates, which have sparked a rebound in automobile sales and propelled home sales, according to Freddie Mac's monthly economic and housing outlook.
"Personal consumption expenditures and residential fixed investment will drive economic activity to about a 3 percent annualized growth rate for the second half of this year with further acceleration to close to 3.5 percent in 2003," said Freddie Mac Chief Economist Frank Nothaft. "A 'double dip' in growth seems out of the question."
Housing is predicted to remain the "bellwether industry" throughout the year; however, due to unemployment rates mortgage default rates are expected to continue to increase in areas that have been more affected by the recession, according to Nothaft.
Interest rates have plummeted in the past month and are expected to average 6.3 percent and 6.2 percent in the third quarter and fourth quarter, respectively, according to Nothaft.
Copyright: Inman News Service