Freddie Mac expects the average 30-year fixed mortgage rate to slip to 5.5 percent this year from 6.3 percent in 2007, marking a 45-year low; but Global Insight Inc. economist Brian Bethune does not expect the drop in mortgage rates to spark a housing rebound. According to him, "People are going to stay away from the market if they see instability, and lenders are going to have a hard time valuing properties and issuing mortgages." Freddie Mac also forecasts a decline in economic growth to 2.3 percent from 2.5 percent and a decrease in inflation to 2.5 percent from 4 percent over the same period.
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