Freddie Mac Issues August Economic Outlook Report

Freddie Mac Issues August Economic Outlook Report

Freddie Mac's August 2005 Economic Outlook report issued this week states that "The brightest light in the U.S. economy continues to be the housing sector."

The report notes that new records were achieved in June for sales of both new and existing houses and sales and are running six percent higher during the first half of 2005 than the same period in 2004, also a record year; a performance that is attracting investors into the market for single family homes. The report quoted data compiled by LoanPerformance showing that investors were responsible for 10.3 percent of prime, conforming mortgages loans taken in the first quarter of 2005 and that another 7.3 percent of mortgages were for the purchase of second homes. The combined 17.6 percent of mortgages represented by these two categories has nearly doubled since 2001. Some builders, the reports said, are now adding provisions to their sales contracts to prevent flipping homes during construction and through the first year or two after completion.