The U.S. economy grew in the final quarter of 2014, but at a slower pace than prior quarters. Despite the fourth quarter decline there appears to be sufficient economic momentum for the economy to move ahead with increased job creation and increased consumer spending. GDP (gross domestic product) for 2014, over the four quarters, grew by 2.4%.
The historical average annual GDP growth is right around 3 percent. Anything under that mark is considered subpar and anything above robust. The last time GDP grew above 3 percent for the whole year was in 2005. A big positive for economic growth in 2015 is expected in the real estate sector. Much of this growth will be fueled by increased household income, increasing rental rates and a decline in mortgage interest rates.
One year ago the average rate for a conforming FHA loan was 4.2%. Last month that rate was 3.47% and todays mortgage rate has declined to 3.23%. This represents a yearly saving of over $800 for a loan of $150,000.
– Jon Dawson