Freddie Mac’s Economic and Housing Research Group finds
a lot to like in the present economic environment. . The company’s quarterly
forecast credits the increasing availability of COVID-19 vaccines and the
easing of virus related restrictions, the passage of the American Rescue plan
and its cash stimulus for households, as setting the stage for economic growth
and sending consumer confidence to a post pandemic high in March. The labor
market, while still needing to add 8.4 million jobs, put 916,000 on the books last
month, the greatest gain since August.

All in all, the report says conditions should  remain generally favorable for the housing and
mortgage market through 2022, although rising rates could provide headwinds
that slow housing activity.
The group predicts the 30-year fixed mortgage rate
will average 3.4 percent in the fourth quarter of 2021, rising to 3.8 percent
in the fourth quarter of 2022.

In addition, it offers the following forecasts:

  • House price growth is expected to average
    6.6 percent
    in this year then slow to 4.4 percent in 2022.

  • Home sales, new and existing, should
    reach 7.1 million in 2021, then fall to 6.7 million homes in 2022.
  • Purchase originations are expected to increase from
    1.39 trillion in 2020 to $1.7 trillion and refinance originations to
    decline from $2.65 trillion to $1.8 trillion this year. They will then drop
    to $1.6 trillion and $770 billion, respectively in 2022. Total
    originations will reach $3.5 trillion this year compared to $4.04 last
    year, and $2.4 trillion 2022.

By Jann Swanson , dated 2021-04-14 13:39:08

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Courtesy of Mortgage News Daily

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