Freddie Mac: The Purchase Market Will Remain Solid Even as Rates Rise
Freddie Mac (OTCQB: FMCC) forecasts the single-family purchase market to remain strong in 2022 despite rising mortgage rates. The Chief Economist suggests an expected moderation in homebuyer demand and house price growth due to increased rates. Key projections include a 30-year fixed-rate mortgage averaging 4.6% in 2022, house price growth at 10.4%, and home sales expected to reach 6.7 million. However, refinance originations are anticipated to decline significantly, from $2.8 trillion in 2021 to $960 billion in 2022.
- Home purchase mortgage originations expected to rise to $2.1 trillion in 2022 from $1.9 trillion in 2021.
- House price growth anticipated at 10.4% in 2022, indicating continued demand.
- Refinance originations predicted to drop significantly to $960 billion in 2022.
- Overall mortgage origination levels to decline to $3.1 trillion in 2022 from $4.8 trillion in 2021.
Freddie Mac Releases Quarterly Forecast
MCLEAN, Va., April 18, 2022 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today predicted that the single-family purchase market will remain solid in 2022 despite increases in mortgage rates. A new Quarterly Forecast released by the company’s Chief Economist estimates that rising rates will lead to moderation in homebuyer demand and house price appreciation. But overall, the housing market will remain a bright spot in the U.S. economy.
“The Federal Reserve’s actions to address inflationary pressure are certainly impacting mortgage rates, which undoubtedly will affect the housing market,” said Sam Khater, Freddie Mac’s Chief Economist. “While the sharp increase in mortgage rates will lead to a precipitous drop in refinance originations in 2022, demand for housing continues to remain solid, propelled by the large swath of first-time homebuyers and prospective purchasers looking to lock in a mortgage rate before they increase further.”
Specific findings include:
- The 30-year fixed-rate mortgage (FRM) is expected to average 4.6 percent in 2022 and 5.0 percent in 2023. In 2021, the 30-year FRM averaged 3.0 percent.
- House price growth is expected to average 10.4 percent in 2022, slowing to 5.0 percent in 2023. House price growth was 17.8 percent in 2021.
- Home sales are expected to be 6.7 million in 2022, decreasing to 6.6 million in 2023. Home sales were 6.9 million in 2021.
- Home purchase mortgage originations are expected to increase to
$2.1 trillion in 2022 and$2.2 trillion in 2023. Originations were$1.9 trillion in 2021. - Refinance originations are expected to continue to soften, declining to
$960 billion in 2022 and$535 billion in 2023. Originations were$2.8 trillion in 2021. - Overall, annual mortgage origination levels are expected to be
$3.1 trillion in 2022 and$2.8 trillion 2023, down from$4.8 trillion in 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
FAQ
What is Freddie Mac's forecast for the housing market in 2022?
How will mortgage rates affect Freddie Mac in 2022?
What are the projected mortgage origination levels for FMCC in 2022?
How many home sales does Freddie Mac expect in 2022?
