A surge of homeowners refinancing into a lower mortgage rates as well as strong homebuyer demand will push mortgage origination volume to $2.1 trillion in 2019, Freddie Mac predicts.
The company forecasts that total originations will reach $1.8 trillion in 2020.
Home sales will reach an annual rate of 5.98 million this year before jumping to 6.03 million in 2020, as builders ramp-up production, the firm predicts.
Single-family housing starts are forecast 870,000 new homes in 2019 but are expected to jump to 940,000 in 2020.
Home prices are forecast to increase 3.4% in 2019, in line with long term growth.
“Despite fears of an economic slowdown, the housing market continues to be a bright spot in the economy,” says Sam Khater, chief economist for Freddie Mac, in a statement. “While mortgage rates have ticked up in recent weeks, they remain lower than they were a year ago which will help boost sales headed into the fall.”
Currently, Freddie Mac is calling for GDP growth of 2.2% in 2019, with trade tensions likely having a visible impact on the second half of the year.
Still, mortgage rates are expected to remain low, with the 30-year fixed-rate mortgage to remain below 4.0% for the remainder of 2019.