【Freddie Mac】A Steadily Growing Housing Market

After increasing throughout April, mortgage rates declined at the start of May. The combined positive impact of low mortgage rates, a strong labor market, low unemployment, and modest wage growth supports our forecast for a steadily growing housing market in 2019.

Real Gross Domestic Product grew at an annual rate of 3.2% in the first quarter, beating expectations. Transitory factors like private inventory investment were behind the first quarter surge and are unlikely to persist throughout the year. We expect GDP to grow 2.3% in 2019 before slowing to 1.8% in 2020.

The Bureau of Labor Statistics reported an unemployment rate of 3.6% in April, which marked a 50-year low. This has informed our decision to lower our unemployment rate forecast to 3.7% for the second quarter of 2019, and we expect it to remain flat for the remainder of 2019, before increasing in 2020. Overall, we expect the unemployment rate to be 3.8% and 3.9% in 2019 and 2020, respectively.

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