“No I’m fine, I just got something in my eye!” – Most loan originators reading this report
Rising rates will not only deter refinancing but will also slow down housing demand, according to Freddie Mac’s latest forecast…(Freddie Mac)
- 2022: Overall originations are projected to fall 30.0% to $3.3 trillion, down from $4.7 trillion in 2021.
- 2023: Overall originations are projected to fall 6% from the year prior to $3.1 trillion.
Even though total originations are expected to fall purchases are expected to rise so if most of your business is purchases you might actually be on the up and up…
- Purchase originations are projected to increase to $2.1 trillion(+11.0%) in 2022 and $2.2 trillion(+4.7%) in 2023 from $1.9 trillion in 2021.
- Refinance originations are projected to fall to $1.2 trillion(-56.0%) in 2022 and $930 billion(-22.5%) in 2023. Refinance originations in 2021 were $2.7 trillion.
Despite the last few weeks of rates skyrocketing, rates are projected to level out at 3.6% in 2022 and then rise to 3.9% in 2023. However, Sam Khater, Freddie Mac’s Chief Economist, argues supply constraints will keep the housing market competitive…
- “As mortgage rates rise, we do expect some moderation in housing demand, causing house price growth to temper. However, the combination of a large number of entrylevel homebuyers facing a shortage of entry-level inventory of homes for sale should keep the housing market competitive,”
Home price growth is also projected to slow, but not retreat, with home prices appreciating at a 6.2% clip in 2022, and that will slow even further to 2.5% in 2023.
- Freddie Mac clocked final home price appreciation at 15.9% in 2021.