Despite concerns about inflation, Freddie Mac’s quarterly forecast reports a solid real estate market that could be down when it comes to demand, predicting strong numbers for the rest of the year.
– The average 30-year fixed rate mortgage is expected to be 3.1% in 2021 and 3.7% in 2022. In 2020, 30-year mortgages averaged 3.1%.
– House prices are expected to rise by 12.1% in 2021 and slow to 5.3% in 2022. In 2020, the growth was 11.3%.
– Home sales are expected to reach 6.9 million in 2021 and remain flat in 2022. In 2020, sales were 6.5 million.
– Sources of purchases are expected to increase to $ 1.8 trillion in 2021 and $ 1.9 trillion in 2022. That’s more than $ 1.5 trillion in 2020.
– Refinancing volumes are expected to decline from $ 2.2 trillion in 2021 to $ 713 billion in 2022. That’s less than $ 2.6 trillion in 2020.
Overall, annual mortgage lending rates are expected to be $ 3.9 trillion in 2021 and $ 2.6 trillion in 2022. These levels totaled $ 4.1 trillion in 2020.
“As the economy continues to recover, the housing market remains strong, even as some setbacks have begun to slow sales across the country,” said Sam Hather, chief economist at Freddie Mac. “It should be noted that the high rise in house prices was supported by increased demand due to low mortgage rates, disposable income after taxes, which increased during the current recession, and a serious shortage of housing supply relative to our population.”
“Despite recent highs in the housing market, recent home mortgage applications data indicate a decline in demand,” added Hather. “We expect a decrease in refinancing activity, as higher mortgage rates reduce activity. Overall, we project total shipments of $ 3.9 trillion in 2021, and drop to $ 2.6 trillion in 2022. ”