Freddie Mac: Strong Housing Market will Continue even as Rates and Prices Rise

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) forecasts a strong housing market despite rising mortgage rates and home prices. The Chief Economist predicts continued homebuyer demand and increased purchase originations in 2022. Key insights include an expected average 30-year fixed-rate mortgage of 3.0% in 2021 and 3.5% in 2022, with house price growth projected at 16.9% for 2021, slowing to 7.0% in 2022. Purchase originations are anticipated to rise to $2.1 trillion in 2022, compared to $1.9 trillion in 2021, while refinance originations are expected to decline significantly.

Positive

• Home purchase originations expected to increase to $2.1 trillion in 2022, up from $1.9 trillion in 2021.
• Projected house price growth of 16.9% in 2021, indicating strong demand despite rising prices.

Negative

• Refinance originations expected to drop from $2.6 trillion in 2021 to $995 billion in 2022.

Freddie Mac Releases Quarterly Forecast

MCLEAN, Va., Oct. 15, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today predicted the continued strength of the single-family housing market even as mortgage rates are expected to modestly increase and home prices rise. A new Quarterly Forecast released by the company’s Chief Economist estimates continued levels of homebuyer demand and a growth in purchase originations in 2022.

“Despite some obvious headwinds, the housing market remains strong as the economy grows,” said Sam Khater, Freddie Mac’s Chief Economist. “Even as mortgage rates are expected to increase and home prices continue to rise, homebuyer demand remains steady as inventory issues have slightly improved.”

Khater continued, “Therefore, in 2022, we expect strong house price growth to lift home purchase mortgage originations by more than $500 billion from 2020.”

Specific findings include:

• The average 30-year fixed-rate mortgage (FRM) is expected to be 3.0 percent in 2021 and 3.5 percent in 2022. In 2020, the 30-year FRM averaged 3.1 percent.
• House price growth is expected to be 16.9 percent in 2021, slowing to 7.0 percent in 2022. Growth was 11.3 percent in 2020.
• Home sales are expected to reach 6.8 million in 2021, remaining flat in 2022. Sales were 6.5 million in 2020.
• Purchase originations are expected to increase to $1.9 trillion in 2021 and $2.1 trillion in 2022. This is up from 2020 when purchase originations came in at $1.6 trillion.
• Refinance originations are expected to soften, declining from $2.6 trillion in 2021 to $995 billion in 2022. This is down from $2.9 trillion in 2020.
• Overall, annual mortgage origination levels are expected to be $4.5 trillion in 2021 and $3.1 trillion 2022. These levels were $4.4 trillion in 2020.

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/d67fa54e-8ec8-4914-a406-913372b97bb0

FAQ

What is Freddie Mac's stock symbol?

Freddie Mac's stock symbol is FMCC.

What does the latest Freddie Mac forecast predict for 2022?

The forecast predicts a continued strong housing market with purchase originations increasing to $2.1 trillion.

What is the expected home price growth for 2022 according to Freddie Mac?

Home price growth is expected to slow to 7.0% in 2022.

How much are refinance originations expected to decrease in 2022?

Refinance originations are expected to decline to $995 billion in 2022 from $2.6 trillion in 2021.