Low mortgage rates and home buyer demand will boost sales for the rest of 2019
Freddie Mac has projected favorable market conditions for the rest of 2019 due to a surge in refinancing and strong homebuyer demand in September.
Continued low mortgage rates and strong refinance activity pushed last month’s origination outlook of $2 trillion to $2.1 trillion in 2019, before an expected decline to $1.8 trillion in 2020.
The GSE expects the 30-year fixed-rate mortgage to stay below 4.0% for the rest of the year. House price growth will also remain unchanged at 3.4%.
Additionally, despite better than expected housing starts data last month, the single-family housing starts forecast remains unchanged at 870,000 new homes in 2019 and 940,000 in 2020, respectively.
With increased housing demand and a projected upward tick in housing supply, the total of new and existing home sales will grow to 5.98 million this year before reaching 6.03 million the following year.
Trade wars continue to put a strain on the housing and mortgage market. Freddie Mac projected a GDP growth of 2.2% throughout 2019.
“Despite fears of an economic slowdown, the housing market continues to be a bright spot in the economy,” Freddie Mac Chief Economist Sam Khater said. “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.”
