Mortgage rates will continue to move up this year according to today's release of Freddie Mac's Quarterly Forecast. The Forecast found the 30-year fixed rate mortgage averging just above 3 per cent for the remainder of the year. The forecast also found that house price growth is extected to be 6.6 per cent in 2021.
While the Mortgage rates and home prices have moved up, Freddie Mac says the housing market remains healthy.
Freddie Mac Chief economist Sam Khater said as the economy continues to improve he expects conditions to remain "generally favorable for the housing and mortgage market." Khater says higher mortgage rates have the potential to dampen the robust demand in the housing market and total loan orginations. He adds, high home prices and low inventory are important obstacles to watch for that could influence the direction of housing market activity.
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