Low mortgage rates, a strong labor market and low unemployment are expected to fuel steady growth in the housing market in 2019, according to Freddie Mac’s May Forecast.
“Our outlook for the housing market remains largely unchanged. We still expect stronger home sales and housing starts in the coming months due to favorable market conditions and accelerating wage growth,” Freddie Mac Chief Economist Sam Khater said in a release.
“Additionally, our quarterly report on refinance activity shows that few U.S. homeowners are choosing to tap into their largest source of wealth despite having a record $16 trillion in home equity available to them,” Khater said. “Most homeowners remain reluctant to increase their mortgage balance, whereas we continue to see balance increases on auto loans, credit cards, and student loans.”
Freddie Mac’s forecast predicts the 30-year fixed-rate mortgage to average 4.3 percent for 2019, which is below last year’s average of 4.5 percent. It expects home sales to surpass 2018 levels and reach 5.98 million units in 2019.
The forecast also predicts house price appreciation to grow to 3.6 percent for 2019; and the refinance share to increase from 30 percent of all originations in 2018 to 33 percent in 2019.