Freddie Mac predicts the 30-year FRM to average 4.1% in 2019
Freddie Mac forecasted that low mortgage rates and a strong labor market would push housing market growth over the next year and a half.
However, the country’s trade tensions with China and Mexico, as well as the effects of 2018’s fiscal stimulus, could pull down GDP growth for the full year of 2019, according to Freddie Mac’s June Forecast.
“Concerns about global growth and ongoing trade disputes have pushed long-term interest rates lower, resulting in mortgage rates seeing their lowest level since fall 2017,” said Freddie Mac Chief Economist Sam Khater.
Freddie Mac anticipated the 30-year fixed-rate mortgage rate to average 4.1% before rising to 4.2% in 2020. Home prices will also appreciate more in 2019, up 3.6%, according to the forecast.
Freddie Mac also expected housing starts to rise to 1.26 million this year and 1.35 million the coming year. Home sales will also bounce back from the 2018 slump and come in stronger at 6.03 million in 201 and 6.19 million in 2020.
Lastly, the GSE said refinance origination volume would soar to around 20% for the rest of the year. Freddie Mac predicted that mortgage origination would also grow to $1.8 billion and $1.7 billion in 2019 and 2020, respectively.
“These low mortgage rates, combined with strengthening homebuilder confidence and an increase in the level of housing permits, are expected to translate into stronger housing starts and increased home sales for the remainder of the year,” Khater said.
