Driven mainly by low mortgage rates and a vibrant job market, U.S. home sales will climb to an annual rate of 6.2 million in 2020 and 6.3 million in 2021, according to Freddie Mac’s most recent economic forecast.
The average rate for a 30-year fixed-rate mortgage will hover around 3.8% in 2020 and 2021, the government-sponsored enterprise predicts.
In addition, home price appreciation is expected to slow, with annual growth rates of 3.2%, 2.8% and 2.1% in 2019, 2020 and 2021, respectively.
Purchase loans will rise steadily to $1.261 billion in 2019, $1.333 billion in 2020 and and $1.377 billion in 2021.
Refinances are forecast to reach $846 billion this year before slowing to $650 billion in 2020 and $475 billion in 2021.
Combined, this will bring total origination volume to $2.0 trillion in 2020 and $1.9 trillion in 2021.
“A more accommodative monetary policy stance and robust labor market helped the U.S. housing market regain its footing in 2019,” says Sam Khater, chief economist for Freddie Mac, in a statement. “Improved sentiment, lower financial market volatility and trade headwinds are setting up a favorable economic environment for continued real estate market growth in 2020.”