Freddie Mac’s most recent monthly economic and housing forecast suggests 30-year mortgage rates, housing starts and home price appreciation might be slightly lower than previously expected in the second half of the year, but loan volume estimates have not changed.
The average rate for the 30-year fixed rate mortgage is expected to rise to 4.4% in the third quarter, but this is down from a July estimate of 4.5%. According to Freddie’s latest forecast, the 30-year will not get that high until 4Q. In July, Freddie Mac expected a 4.6% average quarterly rate by yearend.
The forecast now pegs average seasonally adjusted housing starts in 3Q at 950,000, compared to a 1.03 million 3Q estimate in July. Home price appreciation in 3Q is estimated at 0.9% on Freddie’s index and 1.5% on Standard & Poor’s-Case Shiller’s, as compared to 2% for both in July 4Q estimates.
For 4Q, Freddie Mac now estimates the average seasonally adjusted housing start rate at 1 million, down from a 1.07 million 4Q estimate in July. Home price appreciation is now expected to drop to zero by 4Q, as compared to 0.4% and 0.5%, respectively, in July estimates for that quarter.
The outlook report also shows the refinancing share of applications in the second quarter came in slightly lower
