HOUSINGNEWS REPORT
NEWS BRIEFS
Time To Privatize the GSEs?
Mortgage Rates Rising While mortgage rates remain low by historical standards, they’ve risen sharply over the past couple of months, pushing the average rate on a 30-year, fixed-rate mortgage (FRM) to 4.32 percent the last week of December 2016, according to Freddie Mac. Meanwhile, a 15-year, fixed-rate mortgage averaged 3.55 percent. A year ago, the 15-year, FRM averaged 3.24 percent. Average rates for 5-year Treasury-indexed hybrid adjustable rate mortgages (ARM) clocked in at 3.30 percent in the last week of December 2016, reported Freddie Mac. A year ago, the 5-year ARM average 3.08 percent.
Even before taking office, Treasury secretary-designate Steven T. Mnuchin said he wants to return mortgage finance giants Fannie Mae and Freddie Mac to the private sector from government control, but House Financial Services Committee chairman Jeb Hensarling (R., Texas), and Sen. Mike Crapo (R., Idaho), have each put forward their own plans that would wind down the two companies. “We got to get Fannie and Freddie out of government ownership,” Mnuchin told Fox Business. “It makes no sense that these are owned by the government and have been controlled by the government for as long as they have.” The federal government took over Fannie and Freddie in September 2008, placing them under Treasury conservatorship at the height of the financial crisis and bailing them out to the tune of $187 billion. Look for the Mnuchin Treasury to reform, recapitalize and then released the GSEs from conservatorship.
As mortgage rates continue to increase, home sales and affordability will continue to be a concern for housing in 2017.
SOURCE: Freddie Mac
PRIMARY MORTGAGE MARKET SURVEY ® (PMMS ® ) U.S. Weekly Averages
Still, ending the government’s conservatorship will not be easy.
SOURCE: Fox Business, New York Times
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