Freddie Mac Quarterly Forecast: Housing Market Continues to Rebound as Mortgage Rates Hover at Record Lows

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) reported a significant increase in mortgage origination volumes as homeowners capitalized on low mortgage rates. Despite economic challenges due to the coronavirus pandemic, the housing market remains strong, with solid refinance activity and continued homebuyer demand. Key forecasts for 2020 include a 3.2% average rate for 30-year fixed mortgages, a 5.5% increase in house prices, and total mortgage origination levels expected to reach $3.582 trillion. For 2021, a slight decrease in home sales and refinance originations is anticipated.

Positive

• Mortgage origination volumes rose due to low rates.
• Expected 5.5% increase in house price growth in 2020.
• Projected total mortgage origination levels of $3.582 trillion for 2020.

Negative

• Refinance originations expected to drop to $1.240 trillion in 2021.
• Home sales projected to decrease to 6.1 million in 2021.

MCLEAN, Va., Oct. 14, 2020 (GLOBE NEWSWIRE) -- According to Freddie Mac’s (OTCQB: FMCC) Quarterly Forecast, total mortgage origination volumes increased over the last several months as many homeowners took advantage of historically low mortgage rates.

“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.”

According to the Forecast:

• The average 30-year fixed-rate mortgage is expected to be 3.2 percent in 2020 and 3.0 percent in 2021.
• House price growth is expected to increase to an annual rate of 5.5 percent in 2020. In 2021, that rate is expected to be 2.6 percent.
• 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.

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/78b8faf5-8af3-4a24-8da6-9e8569572e7e

FAQ

What is Freddie Mac's stock symbol?

Freddie Mac's stock symbol is FMCC.

What are the expected mortgage origination levels for 2020?

The expected mortgage origination levels for 2020 are $3.582 trillion.

What is the forecast for 30-year fixed mortgage rates in 2021?

The forecast for 30-year fixed mortgage rates in 2021 is 3.0 percent.

By how much is house price growth expected to increase in 2020?

House price growth is expected to increase by 5.5 percent in 2020.

What is the projected number of home sales for 2020?

The projected number of home sales for 2020 is 6.2 million homes.