Freddie Mac is predicting home sales will total 6 million by the end of 2019. That number looks to grow to 6.1 million in 2020, which will have a positive impact on purchase mortgage origination.
Its November 2019 forecast says modest increases in home sales and house prices should boost purchase mortgage originations to $1,255 billion and $1,299 billion in 2019 and 2020, respectively.
“The economy has seen increased volatility in November as hopes for a favorable resolution to the trade dispute have recently waned,” said Sam Khater, Freddie Mac’s chief economist, in a press release. “However, given low interest rates, modest inflation and a solid labor market, the U.S. housing market continues to stand firm, and, our forecast is for the housing market to maintain momentum over the next two years.”
Other highlights from the forecast include:
The average 30-year fixed-rate mortgage rate is forecasted to be 4.0 percent for the remainder of 2019 and to decrease slightly to 3.8 percent in 2020.
The surge in refinance activity will carry over into next year, with a projected $846 billion and $834 billion in single-family refinance mortgage originations in 2019 and 2020, respectively.
Overall, expect annual mortgage origination levels of $2.1 trillion in 2019 and 2020.
To learn more about the Freddie Mac forecast, click on the image above.