Looking ahead to the second half of the year, Freddie Mac describes the mixed housing market data findings in their July 2014 US Economic and Housing Market Outlook as “bittersweet.” The government-sponsored enterprise’s outlook highlights touched on the following key factors:
- Freddie Mac anticipates a 14% increase in new construction in 2014 over 2013 with “multi-family housing accounting for one-third” of all new construction.
- Home sales, both new and existing, are projected to accelerate through the end of the year. Nevertheless, Freddie Mac believes total sales will still fall by an estimated 2% below last year’s sales.
- Improving employment rates are anticipated to increase household formations. This effect will cause rental housing demand to rise as well as promote future gains in the single-family sales market.
- Because of the uninspiring spring selling season, mortgage originations have dropped, causing Freddie Mac to reduce their mortgage origination forecast to 6%.
- Finally, Freddie Mac foresees fixed rate mortgage interest rates “to rise very gradually during the year in keeping with the Fed’s plan to keep interest rates low at this time” and they expect the 30-year fixed rate mortgage to remain at a historic low of 4.4% by the end of the year.
Read the full press release at http://mwne.ws/1nlCs5D.