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Mark Hemingway

Mortgage Market Update for July 31st

Wednesday, July 31, 2019 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

Freddie Mac released its Economic & Housing Research Forecast for July showing that the housing market will see increased momentum due to low mortgage rates. Freddie Mac is forecasting that the 30-year fixed-rate mortgage will average 4.1% in 2019 and 4% in 2020. In addition, consistently strong homebuilder confidence and lower mortgage rates support our view that housing starts and sales will recover from their slump in 2018. Home prices are expected to rise 3.4% in 2019 and 2.6% in 2020.

Freddie Mac went to forecast that total mortgage originations to be $1.8 trillion in 2019 and $1.7 trillion in 2020. The refinance share of originations is expected to increase to 34% in 2019, before decreasing slightly to 28% in 2020, as the effect of lower rates on refinance originations tapers over time. As far as economic growth, Gross Domestic Product is expected to average 2.1% in 2019 before decelerating to 1.8% in 2020.

Private payroll growth rebounded in July after a weak reading in June. ADP private payrolls rose 156,000 in July, above the 150,000 expected while June was revised higher to 112,000 from 102,000. "Job growth is healthy, but steadily slowing," Mark Zandi, chief economist at Moody's Analytics, said in a statement. "Hampering job growth are labor shortages, layoffs at bricks-and-mortar retailers, and fallout from weaker global trade."

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