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For Immediate Release January
11,
2005
FREDDIE MAC ANNOUNCES 2005 HOUSING AND ECONOMIC OUTLOOKMcLean, VA – Freddie Mac economists announced today that the outlook for the U.S. housing market remains strong. Freddie Mac expects housing starts to retreat by one-two percent from the record pace of 2004, while mortgage rates will continue to be affordable, with 30-year fixed-rate mortgages not increasing more than fifty basis points in 2005. Adjustable rate mortgages (ARMs), a very popular product in 2004, will continue to be attractive to homeowners, and the most popular ARM product is likely to be the five-year Hybrid, where the rate is fixed for the first five years, and then adjusts annually for the next 25 years. Home prices will moderate from their fast pace in 2004, and nationally home prices are forecast to increase by about seven percent. Over the twelve months ended September 30, home prices climbed an average 12.4 percent nationally. Forecast details Freddie Mac is a stockholder-owned corporation established by Congress in support of homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage passthrough securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for one in six homebuyers and two million renters in America. ###
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