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CHALLENGES AND OPPORTUNITIES <br />70.0% <br />60.0% <br />50.0% <br />40.0% <br />30.0% <br />20.0% <br />10.0% <br />0.0% <br />Lender -Mediated Sales: 2005-2018 <br />• Ramsey <br />IL <br />Anoka Cty Metro Area <br />2005 06 07 08 09 2010 11 12 13 14 2015 16 17 18 <br />• Mortgage Rates. Mortgage rates play a crucial part in housing affordability. Lower mort- <br />gage rates result in a lower monthly mortgage payment and buyers receiving more home <br />for their dollar. Rising interest rates often require homebuyers to raise their down payment <br />in order to maintain the same housing costs. Mortgage rates have remained at historic lows <br />over the past several years coming out of the Great Recession. Although rates ticked -up in <br />2018 and early 2019, concerns about global growth have pushed long-term interest rates <br />lower as mortgage rates have fallen to their lowest levels since 2017. The Federal Reserve <br />has indicated that rates will be stable for the next year and has hinted at a possible rate cut. <br />A rate cut would further reduce lending costs and increase affordability. A significant in- <br />crease in rates (+1% or more; over 5% in the short term — although unlikely in next year) <br />would greatly affect the housing market and would slow projected for -sale housing de- <br />mand. <br />The following chart illustrates historical mortgage rate averages as compiled by Freddie <br />Mac. The Freddie Mac Market Survey (PMMS) has been tracking mortgage rates since 1971 <br />and is the most relied upon benchmark for evaluating mortgage interest market conditions. <br />The Freddie Mac survey is based on 30-year mortgages with a loan -to -value of 80%. <br />MAXFIELD RESEARCH AND CONSULTING 156 <br />