Quarterly Research Package and Forecast Q1 2021
Top Market Themes for April 2021
Freddie Mac’s Single-Family Top Market Themes research package sheds light on current housing trends.
- Stimulus, Vaccination & Economic Recovery
- Fiscal and monetary policy support kept the economy afloat.
- COVID cases are improving and vaccine distribution is picking up.
- Economic prospects are looking up on vaccines and stimulus.
- New Housing Trends
- Intensified migration to Southern and Western Regions.
- Fewer moves into urban neighborhoods.
- Increased moves to lower density areas.
- Housing Affordability on Decline
- Housing shortage has worsened during the pandemic.
- There has been double digit house price appreciation posing a risk to affordability.
- Forbearance Trends
- Share of loans in forbearance are on decline.
- Forbearance drove lower housing inventory.
- Forbearance prevented defaults and foreclosures.
First Quarter Forecast Released on April 14, 2021
Highlights from the forecast point to a strong housing market in 2021 fueled by record low interest rates and remote work.
- The average 30-year fixed-rate mortgage is expected to be 3.2 percent in 2021 and 3.7 percent in 2022.
- House price growth is expected to be 6.6 percent in 2021, slowing to 4.4 percent in 2022.
- Home sales are expected to reach 7.1 million in 2021, falling to 6.7 million homes in 2022.
- Purchase originations are expected to increase to $1.7 trillion in 2021 before dropping to $1.6 trillion in 2022.
- Refinance originations are expected to be $1.8 trillion in 2021 before falling to $770 billion in 2022.
- Overall, annual mortgage origination levels are expected to be $3.5 trillion in 2021 and $2.4 trillion 2022.