Q2 2022 Research and Insights

Macroeconomic Outlook

  • Economic outlook deteriorating with output declining in Q1 2022 and on track to decline in the third quarter as well.
  • Recession risks on the rise.
  • Labor market remains strong with unemployment rate at close to 50-year low.
  • Inflation is impairing consumer confidence and food and energy costs could continue to worsen.

Housing & Mortgage Market Outlook

  • Rates up 2.7% over the last year; had the largest one year increase this century.
  • Housing market slowing with softer purchase applications, declining home sales and housing starts.
  • Refinances have almost dried up.
  • Home prices remain high as the housing inventory shortage continues.

Distress Supply, Delinquencies & Foreclosures

  • Mortgages in forbearances low; loans which exited forbearance performing or have paid off.
  • Foreclosures tick up slightly.
  • Distress sales at low levels as compared to the historical average.
  • Federal Housing Administration (FHA) Early Payment Defaults (EPDs) performance is deteriorating.

Quarterly Forecast Released on July 20, 2022

  • The 30-year fixed-rate mortgage (FRM) is expected to average 5% in 2022 and 5.1% in 2023. In 2021, the 30-year FRM averaged 3%.
  • House price growth is expected to average 12.8% in 2022, slowing down to 4% in 2023. House price growth was 17.8% in 2021.
  • Home sales are expected to be $6 million in 2022, decreasing to $5.4 million in 2023. Home sales were $6.9 million in 2021.
  • Home purchase mortgage volumes are expected to increase to $2 trillion in 2022 slowing to $1.9 trillion in 2023. Purchase originations were $2 trillion in 2021.
  • Refinance originations are expected to decline to $0.9 trillion in 2022, slowing further down to $0.5 trillion in 2023. Refinance originations were $2.8 trillion in 2021.
  • Overall, annual mortgage origination levels are expected to be $2.8 trillion in 2022, and $2.3 trillion in 2023, down from $4.8 trillion in 2021.

 

Download the Reports

economic housing market themes and outlook

Economic & Housing Market Themes and Outlook

Freddie Mac’s Single-Family Top Market Themes research package sheds light on current macroeconomic outlook, housing and mortgage outlook, and delinquencies and foreclosures.

second quarter forecast q2 2022

Third Quarter Forecast

Highlights from the forecast suggest market slowdown will continue as high rates and prices exacerbate affordability challenges.

 

Disclaimer

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