The Wall Street Journal released the results of their monthly forecasting survey of economists.  Of interest to the reverse mortgage industry: the economists expect housing prices to continue to decline.  Even more worrisome, they expect the 10-year treasury bond, one of the factors upon which the CMT HECM interest rate is based,  to nearly double to 4.40 by December 2010. Housing starts are also expected to be a low value this year.  The majority of respondants don’t expect the Case-Schiller index to rise until Q1 or Q2 of 2010. Yet, there appears to be a discontinuity between the expected performance of the economy and the expected performance of the housing market. In other words, 92% of the economists believe the economy can sustain a recovery while housing prices are still falling, and given that many see the recession ending soon, it seems like they predict that will be the case.

While predictions are nothing but predictions, a severly increased 10-year treasury bond rate and falling home prices would not be good for the reverse mortgage industry, disqualifying more customers and reducing the amount borrowers are able to receive for their homes.  All that can be done now is to wait…