Even
though this past year was marked by challenges, notable progress was made on
several fronts. Rates remained at historical lows in an effort to help fuel the
economy. The housing market significantly benefited from low rates, which
helped to further enhance economic development. Here is some important
information about economic developments in the coming months:
-
Mortgage rates are expected to rise, which could affect refinancing efforts and
the housing market. Some economists predict that rates for a 30-year mortgage
will pass 6 percent this year as the government reduces housing market support.
However, rates in the 5 percent range are exceptionally low by historical
standards, providing opportunities for homeowners.
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Pending home sales are well above year-ago levels, which demonstrates the
housing market has gained momentum over the past year. The extended homebuyer
tax credit will help reignite the momentum and hopefully contribute to an
expected surge in early spring. This tax credit, which expires at the end of
April, reduces taxes dollar-for-dollar up to $8,000 for new homebuyers and
$6,500 for buyers who already own a home.
-
The number of newly laid-off workers filing claims for unemployment benefits
has continued to drop, which is a positive sign the job market is improving as
the economy gradually recovers. New jobless claims have dropped steadily since
the fall, which indicates the economy will be creating jobs and the
unemployment rate will recede.
-
U.S. auto sales ended 2009 on a high note after a challenging year in which two
auto giants filed for bankruptcy. The U.S. market is positioned for a steady
rebound this year and has set production plans at a higher level to help
replenish inventories.
Economic activity will carry on and build the momentum needed for markets to
improve and the economy to reach a sustainable recovery.
