An overall increase in home sales for the rest of 2019 will be dampened by the ongoing shortage of homes and rising house prices, according to Freddie’s Mac’s latest forecast.
Freddie Mac expects home sales to reach 6 million in 2019, before reaching its 2017 levels in 2020 at 6.12 million.
“We expect to see stronger housing starts and increased home sales for the remainder of the year as homebuyers benefit from very attractive mortgage rates, lower prices at the gas pump, plus a gradual bump up in wages,” Freddie Mac’s Chief Economist Sam Khater said in a release. “While this affordability boost is welcomed, rising demand in the face of limited homes for-sale is likely to put even more upward pressure on house prices.”
According to the forecast, the 30-year fixed-rate mortgage will average 4.1 percent in 2019, before decreasing to 4 percent in 2020. Additionally, Freddie Mac predicts refinances to rise above 30 percent in 2019 and lower mortgage rates to translate into higher annual mortgage origination levels of $1.8 trillion and $1.7 trillion in 2019 and 2020, respectively.
Freddie Mac forecasts house price appreciation to average 3.4 percent for 2019.