Sep 20, 2016
Freddie Mac: Housing still ‘bright spot’ for U.S. economy
McLEAN, Va. – Freddie Mac today released its outlook for September showing that housing remains a bright spot for the U.S. economy.Among outlook highlights:Freddie Mac expects the 30-year fixed-rate mortgage to average 3.6 percent in...
McLEAN, Va. – Freddie Mac today released its outlook for September showing that housing remains a bright spot for the U.S. economy.
Among outlook highlights:
- Freddie Mac expects the 30-year fixed-rate mortgage to average 3.6 percent in 2016, the lowest annual average in over 40 years. The current record low annual average occurred in 2012 at 3.66 percent.
- Falling mortgage rates (from 4 percent at the end of 2015 to about 3.5 percent in third quarter 2016) have more than offset the rise in house prices in most markets, helping to preserve home affordability.
- Freddie Mac is revising its forecast of home price appreciation to 5.6 percent and 4.7 percent in 2016 and 2017, respectively. This is up from last month’s forecast of 5.3 percent for 2016 and 4 percent for 2017.
- Cash-out refinance activity was on the rise in the second quarter, with an estimated $13.3 billion net dollars of home equity converted to cash during refinancing. This is up from $11.4 billion in the first quarter of 2016 but substantially less than the peak cash-out refinance volume of $84 billion during second quarter 2006.
- The U.S. remains on track for mortgage originations to reach $2 trillion in 2016, the highest total since 2012.
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