Mortgage rates are expected to remain near record lows through next year and home prices are expected to climb, though not as quickly as this year, according to Freddie Mac’s quarterly housing forecast.
The forecast predicts:
- The average 30-year fixed-rate mortgage is expected to be 3.2 percent in 2020 and 3.0 percent in 2021. Currently, rates sit at 2.87 percent.
- House price growth is expected to increase to an annual rate of 5.5 percent in 2020 before slowing to 2.6 percent next year.
- Home sales are expected to increase in 2020 to 6.2 million homes and decrease in 2021 to 6.1 million homes.
- Purchase originations are expected to increase to $1.414 trillion in 2020 and $1.445 trillion in 2021.
- Refinance originations are expected to be $2.168 trillion in 2020 before falling to $1.240 trillion in 2021.
- Overall, the forecast expects annual mortgage origination levels to be $3.582 trillion in 2020 and $2.685 trillion 2021.
“Even as the economy faces challenges from the coronavirus pandemic, the housing market has been showing strength,” said Sam Khater, Freddie Mac’s Chief Economist. “Refinance activity is solid and homebuyer demand continues, resulting in increased sales and an acceleration in house price growth.”