In hindsight, it is clear that 2011 was decidedly mixed in terms of housing markets about the nation.

Freddie Mac – the government sponsored lending giant – projected that lenders would write $ 1.8 trillion in house loans final year. The group revised that estimate downward to $ 1 trillion partway through the year and lenders ultimately wrote $ 1.three trillion in home loans in 2011.

That’s down 23.53 percent from $ 1.7 trillion in 2010 and down 60.61 percent from $ three.three trillion when housing markets peaked in 2005. Furthermore, the greater-than-expected results had a lot to do with refinancing.

The finish of December marked the ninth consecutive week in which the typical interest rate on a 30-year mortgage was below four percent and property owners responded in kind. The national Mortgage Bankers Association reports that 4 in 5 mortgage applications in December were for refinancing, although Freddie Mac reports that two-thirds of the applications it received final year were for purchases.

The 2011 results make a lot of sense when a single considers that the economic climate is still in recovery. Unemployment rates stay a concern, thus keeping more than a couple of potential buyers out of the market – men and women looking for work or worried about keeping their jobs usually are not in a hurry to purchases homes. In troubled economic occasions, it also tends to make sense that home owners are searching to refinance and take benefit of historically low interest rates.

What’s the great news in all of this? Bear in mind that mortgage rates peaked in 1981 and 1982 at around 16 percent, but customers don’t have that dilemma and will not in truth have to be concerned about rising interest rates for some time. Freddie Mac’s economists predict that interest rates will stay low, averaging 4.5 percent by the end of 2012 and hitting 5.4 percent next year.

Of course, low interest rates don’t mean a lot if consumer confidence is low. New York-based the Conference Board reported its Consumer Confidence Index rose to 64.5 percent, up from 55.two in November. The proportion of shoppers expecting company conditions to boost increased to 16.7 percent in December from 13.7 percent the prior month, although those anticipating a lot more jobs in the months ahead improved to 13.3 percent from 12.four percent.

If consumer confidence does continue to strengthen and unemployment decreases, it really is affordable to anticipate other sectors of the economy to benefit. Consumer confidence, soon after all, is a major indicator of whether men and women will acquire everything from properties to cars to virtually anything else, following all.

The data shows us that economic conditions in common – and the housing market place in specific – are nevertheless in recovery. Freddie Mac is anticipating some gains in 2012 and projects that residence rates will still decline throughout the year.

For buyers in a position to purchase a house, they’ll be in a position to take benefit of low interest rates and dropping prices. Those homeowners looking to lower their monthly mortgage payments can take benefit of low rates.

In sum, 2011 was a year in which housing markets continued to recover. How long that recovery will take is anyone’s guess, but at least things may be headed in the appropriate direction this year.

Home Sweet House is written by Ethan C. Nobles and is sent weekly to publications all through the All-natural State on behalf of the Mortgage Bankers Association of Arkansas.