Los Angeles, CA (PRWEB) January 24, 2012
Freddie Mac reported that the average 30-year fixed home loan interest rate fell to a new record low on Thursday, settling at 3.88 percent. However, Freddie Mac’s vice president, Frank Nothaft, made a double-sided statement, hinting at both recovery and stagnation in the nation’s real estate market.
Nothaft said in a statement that rates for mortgage loans “were nearly unchanged this holiday week in lieu of a mixed bag of economic data reports.”
The mortgage-security company’s vice president elaborated on that mixed bag of reports by revealing December provided a small 0.1 percent rise in retail sales and a meager 0.4 percent rise in industrial production. However, home builder confidence rose for the fourth consecutive month, leveling off at the highest level seen since June 2007.
While the statement shows positive forward movement, the industrial production rate should raise a red flag. Construction for industrial production is telling of the job market. Generally speaking, the rate has been on the rise, but every few months, industrial production has been taking a small dip—hinting the job market has yet to fully find its feet. The Federal Reserve Board is planning to release a revised version of their industrial production report on March 30, 2012.
Despite the industrial market’s unexpected slow growth, Nothaft’s statement does reveal good news for the housing construction industry. Those in the construction business suffered a severe blow as the housing market collapsed, but Freddie Mac’s report that their morale remains high is very significant.
While housing sales only rose 0.1 percent, construction workers’ morale is telling that they believe the Fed’s intentional move at keeping home loan interest rates low has been a smart and healthy move for the economy.
As jobs begin to return, and consumers begin taking out mortgage loans to fund property purchases priced at historic lows, the nation should experience a domino effect of economic stimulation.
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