Skip to Page Content | Skip to Site Navigation | Skip to Section Navigation

Posts by Frank E. Nothaft

Chief Economist Frank E. Nothaft

Frank E. Nothaft is Freddie Mac’s chief economist. Nothaft is responsible for forecasts, research and analysis of the macroeconomy, housing and mortgage markets. He is also involved in affordable lending analysis and policy issues affecting the housing finance industry.

Full Bio 


Housing America's Families

The U.S. is in the early stage of an economic expansion that began at the end of 2009 or the start of this year. As is sometimes the case in the initial phase of a recovery, there are mixed messages from economic indicators on the overall health of the macroeconomy and of the housing market. GDP growth surged late last year, but slowed in the second quarter. Similarly, job market growth turned positive last winter but appears to have lost momentum. The choppy pattern of economic recovery is not unusual and will likely continue throughout this year, with clearer signs of expansion eluding us before next year.

Still, there are a number of positives in the housing market. For one, declines in home sales, construction, and house prices have slowed or stopped – and have even rebounded in some metropolitan markets. This recovery has been supported, in part, by the low interest rate policy of the Federal Reserve and the active involvement of Freddie Mac, Fannie Mae and Ginnie Mae to assure that an adequate supply of funds is available to meet the mortgage credit needs of America's families. Mortgage rates on loans ineligible for pooling into their securities, such as "jumbo" loans, carry fixed-rates that are nearly a full percentage point above the rates on "conforming" loans.

Read More

What's Driving Mortgage Delinquencies?

A recent survey by the Mortgage Bankers Association (MBA) showed that nearly one in seven American households with a mortgage was delinquent at yearend, meaning they'd missed at least one payment or were in foreclosure proceedings. Moreover, the MBA's fourth quarter 2009 National Delinquency Survey reported that the percentage of seriously delinquent loans (at least 90 days past due or in foreclosure) and the number of loans in foreclosure are at the highest levels recorded in the 40-plus-year history of the survey. The non-seasonally adjusted (NSA) seriously delinquent rate for all mortgages outstanding – which is our primary delinquency metric at Freddie Mac – climbed nearly a full percentage point to 9.7 percent at the end of the fourth quarter.

Compared with the third quarter, the NSA serious delinquency rate increased for all loan types. Not surprisingly, subprime adjustable-rate mortgages had the highest delinquency rates, as these loans dominated subprime origination activity at the height of the boom and carried more high-risk features. More than 40 percent of subprime borrowers with adjustable loans were seriously delinquent at yearend – more than eight times the rate for prime borrowers with conventional fixed-rate loans.

Read More

Are We There Yet?

Children on long trips often cry out, "Are we there yet?" Economists and the public at large have been asking the same question about when the recession will end. With economic growth in the third quarter, signs of a stronger fourth quarter, a sharp decrease in monthly job losses, low interest rates and a stabilization of financial markets, the outlook has been improving steadily since early summer.

Even in the housing sector, which was ground zero for many of the economic troubles during the crisis, signs are looking up. Total new and existing home sales have risen 43 percent through November from their January low and home prices have leveled off in many indexes. And while the national figure took a dip in November, single-family construction has begun to ascend in some markets. We should be "there" in the next few months if we aren't already.

Read More

Newer


About

Our Executive Perspectives feature insights from company leaders on key trends in housing finance and how Freddie Mac is supporting the nation's housing recovery.

Subscribe to Executive Perspectives

Check Out Our New Blog on Housing

Back to Top