A spring recovery?

Mark Vitner, managing director and senior economist with Wells Fargo Securities, was in town from Charlotte, NC for a talk with a trade group (and a particularly exciting Twins Game), and I sat down with him for a candid talk about two key elements of the housing market. On mortgage interest rates: Vitner said that he expects a couple of upcoming and closely watched indicators: the unemployement rate and the ISM (Institute for Supply Management) survey, to come in weaker than expected, causing investors to seek the safe haven of long-term bonds. That means a good chance of more declines in mortgage interest rates, including rates on the 30-year fixed-rate mortgage making an unprecedented dip below 4 percent. On the recovery: Despite such economic, and probably short-lived, volatility, he believes that economic fundamentals are largely headed in the right direction and expects a housing recovery in the spring, but probably not the kind of rising market we saw early this decade. Vitner anticipates a recovery defined by modest declines in inventory, small increases in pending sales and stabilization in prices.