Freddie Mac has released its April 2018 Outlook with a couple of important notes and highlights mortgage professionals should be aware of. The complete outlook features trends and statistics that will aid in locating the top markets nationwide.
The outlook featured a full economic forecast showing strong growth across all four quarters. One important trend to note is the increase of interest rates as the economy grows.
"We expect mortgage rates to follow the 10-year Treasury higher and average 4.9 percent and 5.4 percent in the fourth quarter of 2018 and 2019, respectively," according to Freddie Mac.
Meanwhile, when it comes to inventory, the company believes the woes are only going to continue. Freddie Mac is forecasting a continuous decline in inventory as available single-family homes come in at 1.41 million in February. According to the report, this is "less than half of the peak in 2007."
Even with more aggressive new home constructions popping up, there is still going to be a lack of inventory, according to the outlook.
"We expect total home sales to increase from 6.12 million in 2017 to 6.3 million in 2018, and to 6.44 million in 2019, with new home sales driving the growth as housing construction keeps grinding higher," according to the forecast.
In terms of purchaser demographics, Freddie Mac believes "Millennials will overtake Baby Boomers as the largest generation" and in addition will move into the housing market.
The company recognized that Millennials' rate of household formation isn't up to speed with that of the Baby Boomers, however, the overall number of Millennials is enough to offset that rate when it comes to the housing market.
To view the full Freddie Mac April 2018 Outlook, click on the image above.