According to Freddie Mac’s US Economics and Housing Market Outlook for the month of
|Real estate Predictions|
Freddie Mac economists have made the following projections in housing for the New Year:
Interest rates are predicted be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dropped below 4 percent. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year 2014.
By the time 2014 ends, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent by last year. Appreciation is expected to drop further to an average of 3 percent in 2015. "Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers," according to Freddie economists. "Historically speaking, that is moving from 'very high' levels of affordability to simply 'high' levels of affordability."
Multi-family mortgage originations
Mortgage originating from the multi-family sector have surged about to 60 percent between 2011 and 2014. This Increase is expected to continue in year 2015, and projected to rise about 14 percent.
Home building is expected to increase in 2015; it is projected to rise by 20 percent from this year. That will help total home sales to climb up to 5 percent, reaching the best sales pace in eight years.
Mortgage originations of single-family homes will drop by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancing is expected to make up 23 percent of originations in 2015; they had been making up more than half in recent years.
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