When the calendar flips to a new year, analysts and economists like to make predictions for the year ahead.
So, today, with the year half-complete, itâ€™s an opportune time to check back to see how the expertsâ€™ predictions are faring (so far).
If youâ€™ll remember, when 2011 closed, the housing market was showing its first signs of a reboot. Home sales were strong, home supplies were nearing bull market levels, and buyer activity was strong.
HomebuilderÂ confidence was at its highest point in 2 years and single-family housing starts had made its biggest one-month gain since 2009.Â
In addition, 30-year fixed rate mortgage rates had just broke below the 4 percent barrier and looked poised to stay there.
There was a lot about which to be optimistic in January 2012.
Yet, there were obstacles for the economy. The Eurozoneâ€™s sovereign debt issues remained in limbo, oil prices were spiking, and the Unemployment Rate remained high â€” three credible threats to growth.
At the time, analyst predictions for the economy occupied both ends of the spectrum, and everywhere in between.
Freddie Mac said home pricesÂ would rise in 2012, for example, whereasÂ analysts at CBS NewsÂ said theyâ€™d fall. Both made good arguments.
As another example, American Banker said mortgage rates wouldÂ rise in 2012. The LA Times, however, saidÂ just the opposite. And, theÂ problem with these predictions is that each party can make such a sound defense of their respective positions that itâ€™s easy to forget that a prediction is really just an opinion.
Nobody can know what the future holds.
A lot has changed since those predictions were made :
- Job growth slowed sharply after a strong Q1 2012Â
- Oil costs dropped rapidly beginning in early-May
- Spain and Italy have joined Greece as potential sovereign debt trouble-zones
Now, none of this was known â€” or expected â€” at the start of the year yet each has made a material change in the direction of both the housing and mortgage markets.
Today, home prices remain low and 30-year fixed rate mortgage rates now average 3.56% nationwide. Home affordability is higher than itâ€™s been at any time in recorded history and, at least for now, low downpayment mortgage products remain readily available.
The experts never saw it coming.
6 months from now, the markets may be different. We canâ€™t know for sure. All we can know is that today isÂ great time to be a home buyer in North Massapequa. Home prices and mortgage rates are favorable.