Freddie Mac September Forecast Hints At A Strong Housing Market This Fall

Dated: October 2 2019

Views: 241


Image title


Although the nation’s trade war is projected to weaken future economic growth, Freddie Mac’s September Forecast indicates the housing market is likely to maintain its strength well into the fall.


“Despite fears of an economic slowdown, the housing market continues to be a bright spot in the economy,” said Sam Khater, Freddie Mac’s chief economist. “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.”


According to the government-sponsored enterprise, U.S. GDP will average 2.2% in 2019, edging down to 1.8% come 2020.


The 30-year fixed-rate mortgage, which dropped to a 3-year low in August, will remain below 4% for the remainder of 2019.


“Concerns over the resolution of trade disputes have injected volatility into global bond markets. Investors have flocked to the safety and stability of U.S. Treasuries, pushing down interest rates,” the GSE writes. “As trade talks ebb and flow, rates follow. Despite the volatility in rates, we expect long-term rates to remain flat on average.”


According to Freddie Mac, the 10-year yield is expected to average 1.8% in 2020, falling from an annual average of 2.1% in 2019.


The company says these low rates will continue to boost home sales, as mortgage origination levels are predicted to climb to $2.1 trillion and $1.8 trillion in 2019 and 2020, respectively.


Given the combination of increased housing demand and a projected upward tick in housing supply, Freddie Mac expects home sales to rise to 5.98 million in 2019, before reaching around 6.03 million in 2020.


“Lower rates have boosted the housing market. Housing starts in August 2019 beat consensus estimates, increasing to 1.36 million units at an annual rate. The August level was the highest since 2007,” Freddie Mac writes. “Higher starts should provide some desperately needed new housing supply. We forecast annual housing starts to average 1.25 million in 2019, increasing to 1.28 million in 2020.”


Source


Blog author image

Mark Ross

For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 30 years in the industry, Mark has gained experience in ....

Latest Blog Posts

How To Become A Landlord

Want to become a landlord? You’re in good company! In today’s hot housing market, rents are on the rise, which may have you wondering whether it’s time to consider becoming a landlord and

Read More

Pandemic Homebuying Remorse

When COVID-19 struck New York City, dietitian Lisa Moskovitz was living in a two-bedroom apartment in Manhattan with her commercial banker husband and 2-year-old twin boys. They had no balcony, no

Read More

Forbearances Decrease Again

For the 20th straight week, servicers’ forbearance portfolio volume dropped — this time a staggering 26 basis points, to 3.50% in the period ending July 11, per a survey from the Mortgage

Read More

What Is The Maximum Price I Can Afford For A House

Imagine you find your dream home: It has a pool, a second-floor terrace and a home office that gets just the right amount of natural sunlight. But it’s at the top of your price range, and even if

Read More