Housing Market Forecast is Bright

Freddie Mac economists predict that the 30-year fixed-rate mortgage will remain below 4% for the remainder of this year, which could continue to bode well for the housing market to ease affordability concerns somewhat for potential buyers.

With lower mortgage rates, economists are predicting that home prices will also moderate, appreciating at 3.4% in 2019, which is in line with long-term growth. Plus, Home Sales Up for Second Consecutive Month and More New Homes Are Entering the Pipeline)

Much of the high demand in the housing market lately has been coming from young adults. “The millennial cohort has now entered the housing market in force and is already driving major changes in buying and selling patterns,” Frank Martell, president and CEO of CoreLogic, said in a statement about its latest housing index that showed home prices moderating.

Source: Freddie Mac

Economy to Strengthen in Second Half of This Year

Economic activity is expected to accelerate in the second half of the year, according to Fannie Mae’s Economic & Strategic Research Group.

“We believe consumer spending will be the largest contributor to growth for the remainder of the year, particularly as consumers’ confidence, household net worth, and income growth prospects have continued to strengthen amid an improving jobs market,” says Doug Duncan, Fannie Mae’s chief economist. “On the downside, the drop in oil prices will likely continue to weigh on nonresidential investment in structures, and on balance we expect net exports to be a drag on growth this year, due in large part to the debt crisis in Greece and deteriorating economic conditions in China.”

Fannie Mae economists expect the housing market to remain part of that strength.

Source: Fannie Mae