FINANCE
Next steps in the housing market
With a new president, a healthier U.S. economy,
and Federal Reserve Chairperson Janet Yellen hint-
ing at as many as four rate hikes this year, 2017 is
shaping up to be a barnburner for home financ-
ing consumers. Here are some other observations
about how the economy might perform this year.
Expect higher lending rates. Improvement in
wage growth, combined with a strong job market,
JEFF ROSEN will give support to consumer spending, which
should help boost the U.S. gross domestic prod-
uct. The GDP is expected to increase to 2.1 percent in 2017 and
2 percent in 2018, which in turn would cast an upward pressure
on mortgage rates.
Fannie and Freddie privatized. Fannie Mae and Freddie Mac
will begin the process of privatization. The agencies have paid
back their TARP loans and have been paying the U.S. Treasury.
Now it’s time to spin them back into the private sector.
Fewer mortgage loans. Higher interest rates are already hav-
ing a negative impact on loan originations and refinancing. A
report from the Kroll Bond Rating Agency predicted a 20 per-
cent drop in loan origination volume in 2017 and a decrease in
refinancing volumes (from $263 billion last year to $145 billion
in the first quarter in 2017).
Lower home prices. Higher mortgage rates likely will result
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NEW JERSEY COPS
■ MARCH 2017
in a decline in sale prices in the residential real estate market
in 2017.
With so many big factors in play, this should be an eye-open-
ing year for the U.S. mortgage sector, especially during the first
quarter. Expect change and volatility, because that’s what ex-
perts are anticipating with mortgages in 2017. d
Call me today at 908-415-6050. Don’t miss out before rate hikes
hit! Unlike other lending programs, the Lending to America’s He-
roes Program has no bank fees and no maintenance fees.