Freddie Mac Quarterly Forecast: As the Economy Recovers, the Housing Market Remains Healthy While Mortgage Rates Move Up

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) anticipates that mortgage rates will rise, with the 30-year fixed-rate mortgage averaging 3.2% in 2021 and 3.7% in 2022. The forecast predicts a decline in total mortgage originations to $3.5 trillion in 2021, influenced by high home prices and low housing supply. Key figures include a projected 6.6% growth in home prices for 2021, a drop in home sales from 7.1 million in 2021 to 6.7 million in 2022, and refinance originations expected to plummet to $770 billion in 2022. These factors may dampen demand in the housing market.

Positive

• Average 30-year fixed-rate mortgage is projected at 3.2% in 2021.
• Home price growth is expected at 6.6% in 2021.

Negative

• Total mortgage originations forecasted to decline to $3.5 trillion in 2021.
• Refinance originations expected to decrease to $770 billion in 2022.
• Home sales projected to fall from 7.1 million in 2021 to 6.7 million in 2022.

MCLEAN, Va., April 14, 2021 (GLOBE NEWSWIRE) -- According to Freddie Mac’s (OTCQB: FMCC) Quarterly Forecast, mortgage rates will continue to move up with the 30-year fixed-rate mortgage averaging just above three percent through the end of 2021.

“As the economy continues to improve, we expect conditions to remain generally favorable for the housing and mortgage market,” said Sam Khater, Freddie Mac’s Chief Economist. “Higher mortgage rates have the potential, however, to dampen the robust demand we’ve been experiencing, and we therefore forecast total originations to decline to $3.5 trillion in 2021.”  

Khater continued, “Other important obstacles to consider include high home prices and low housing supply that will certainly influence the trajectory of purchase activity specifically.”

According to Freddie Mac’s Forecast:

• The average 30-year fixed-rate mortgage is expected to be 3.2 percent in 2021 and 3.7 percent in 2022.
• House price growth is expected to be 6.6 percent in 2021, slowing to 4.4 percent in 2022.
• Home sales are expected to reach 7.1 million in 2021, falling to 6.7 million homes in 2022.
• Purchase originations are expected to increase to $1.7 trillion in 2021 before dropping to $1.6 trillion in 2022.
• Refinance originations are expected to be $1.8 trillion in 2021 before falling to $770 billion in 2022. 
• Overall, annual mortgage origination levels are expected to be $3.5 trillion in 2021 and $2.4 trillion 2022.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac, and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT:
Angela Waugaman
703-714-0644
Angela_Waugaman@FreddieMac.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/dd6ad112-3789-49b1-a598-d2c08991fdce

FAQ

What is Freddie Mac's forecast for mortgage rates in 2021?

Freddie Mac forecasts the average 30-year fixed-rate mortgage to be 3.2% in 2021.

How much are total mortgage originations expected to decline in 2021?

Total mortgage originations are projected to decline to $3.5 trillion in 2021.

What home price growth is expected in 2021 according to Freddie Mac?

Home price growth is expected to be 6.6% in 2021.

What is the projection for refinance originations in 2022?

Refinance originations are expected to decrease to $770 billion in 2022.

How many home sales are predicted for 2022?

Home sales are expected to fall to 6.7 million in 2022.