Freddie Mac has released its Economic & Housing Research Outlook. Some notable findings include:
- Freddie’s Outlook predicts that mortgage rates will wind up averaging 4.9 percent in Q4 2018 and 5.4 percent in Q4 2019.
- Freddie Mac’s baseline economic forecast has the U.S. economy continuing to grow with gradual increases in interest rates. In this environment, U.S. home sales should post modest growth over the next two years.
- Freddie Mac forecasts supply to pick up over the next year, whereas demand, while getting a boost this year from tax reform, would start cooling off due to rising mortgage rates. Freddie Mac also forecasts inflation to pick up by the end of 2019.
- Freddie Mac concludes: “The broader economic environment remains favorable for home sales. But without new home construction and increased housing supply, home sales in the U.S. will have a hard time growing from current levels. If incomes grow and mortgage rate increases are gradual, then the housing market should post modest growth this year and next.”
Read the full report here.