Where’s the bottom? Economist predicts ‘likely’ this year

Frank Nothaft, chief economist at Freddie Mac, told attendees gathered for the National Association of Realtors annual midyear meetings in Washington, D. C. that he expects the 30-year fixed-rate mortgage to trend up to 5.25 percent by the end of the year and for home sales to rise 5 percent.

“National home price indices are close to a bottom and prices are likely to bottom sometime this year,” Nothaft said.

Nothaft is more optimistic on job growth, expecting 2.0 million to 2.5 million jobs created in 2011 with unemployment dropping to 8.4 percent by the end of the year. In addition, refinancing activity in 2011 will be only half of what it was last year.

“As a result, banks may become more willing to lend to home buyers,” Nothaft said.