Looking Ahead Per Freddie Max

The last few years there has been approximately 2% economic growth which has created economic environment that is favorable for housing and mortgage markets.  This environment is expected to continue into 2018.  Prior year’s home sales growth has been the highest since 2007, and going forward expected home sales to be primarily driven by new home sales.  According to FHFA house price index, there was a 6.6% house price rise from the 2nd quarter of 2016 to the 2nd quarter of 2017, but expect a lower rise in house prices in 2018 due an expected rise in housing starts, and gradual increase mortgage rates.  Concerning refinancing there has been a recent shift from refinancing to a purchase-oriented market.  This is due to the fact, homeowners have taken advantage of low interest rates, and that mortgage rates are slightly up, therefore diminishing the desire to refinance.  Finally, some homeowners may want to tap into home equity that has increased during the past few years.  Doing this may allow a homeowner to do home improvements, and consolidate debts, etc.