A supply and demand imbalance in housing slowed the market’s sales activity during the first half of the year, according to Freddie Mac’s July Forecast
. However, the year’s sales volume is on target to beat last year’s levels.
Freddie Mac is predicting that total home sales, both new and existing, will rise by 2.5 percent and home prices are expected to grow 6.7 percent this year. The 30-year fixed-rate mortgage is forecast to average 4.6 percent this year, while total single-family first-lien mortgage originations are expected to fall by around 7 percent this year to $1.69 trillion, due primarily to decreased refinance activity.
“Home sales have mostly moved sideways for much of the year, but given the sizeable demand for buying in most markets, there’s hope for a small breakout in the months ahead,” said Freddie Mac Chief Economist Sam Khater. “Mortgage rates have stabilized in recent months, and in some high-cost markets, price appreciation is showing some signs of easing. If new and existing housing supply can increase meaningfully, sales will follow.”