The housing market will see home sales increase from 6 million in 2019 to 6.2 million in 2020 and, to 6.3 million in 2021, according to a new forecast issued by Freddie Mac.
The government-sponsored enterprise (GSE) predicted the average 30-year fixed-rate mortgage rate will reach 3.8 percent in 2020 and 2021. Simultaneous, house price growth is predicted to decelerate from 3.2 percent in 2019 to 2.8 percent in 2020 and 2.1 percent in 2021.
Furthermore, Freddie Mac is pointing to purchase originations rising from $1,261 billion in 2019 to $1,333 billion in 2020 and $1,377 billion in 2021. Refinance originations are forecast to be $846 billion in 2019 before slowing to $650 billion and $475 billion in 2020 and 2021, respectively.
“A more accommodative monetary policy stance and robust labor market helped the U.S. housing market regain its footing in 2019,” said Sam Khater, Freddie Mac’s chief economist. “Improved sentiment, lower financial market volatility and trade headwinds are setting up a favorable economic environment for continued real estate market growth in 2020.”