【Freddie Mac】Optimism Heading into 2020

Early in 2019 housing market activity contracted as the shock of higher interest rates in 2018 and early 2019—the 30-year fixed mortgage was above 4.5% from April 2018 to January 2019—worked through the system. But interest rates fell throughout 2019 providing a boost to a housing market which also benefited from robust job growth and low unemployment. With the favorable economic environment projected to continue, the housing market is primed for modest growth in 2020 and 2021.

We expect mortgage rates to remain low over the next two years, averaging 3.8% in 2020 and 2021. The housing market will continue to stand firm: home sales will increase from 6.0 million in 2019 to 6.2 million and then to 6.3 million for 2020 and 2021, respectively. House price growth will continue to decelerate through 2021 with annual rates of 3.2%, 2.8% and 2.1% in 2019, 2020 and 2021, respectively.

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