Freddie Mac: Housing Market Remains on Solid Ground

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Despite the possibility of an economic slowdown, the housing market appears to be in good shape and mortgage originators should see increased volume in 2019 and 2020, according to Freddie Mac’s most recent forecast.

Mortgage origination volume will reach $2.0 trillion this year and $2.1 trillion in 2020, driven by increases in both refinances and purchases, the company predicts.

The recent surge in refinance activity will carry over into next year, Freddie Mac says. Single-family refinances are forecast to reach $789 billion this year and $785 billion in 2020.

Modest increases in home sales and home prices will push purchase originations to $1.2 trillion this year and $1.3 trillion in 2020, the company says.

Home sales are forecast to rise to 6.0 million this year and to 6.1 million in 2020.

Home prices are predicted to rise 3.3% in 2019 and 2.8% in 2020.

Mortgage rates are forecast to rise modestly, with the average rate for a 30-year fixed-rate mortgage rate to hover around 3.7% in 2019, ticking up slightly to 3.8% in 2020.

“Economic growth has slowed significantly across the globe, but the slowdown has been more muted domestically,” explains Sam Khater, chief economist for Freddie Mac, in a statement. “In the U.S., the slowdown has been caused by a contraction in manufacturing and a decline in business investment, partly due to weakening business confidence and uncertainty around the lack of a trade deal with China.

“However, the housing market remains on solid ground with housing starts, building permits, existing home sales, and new home sales all outperforming the broader economy,” he adds.

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