Freddie Mac Chief Economic Sam Khater recently answered questions about what to expect from the housing market in the year ahead. Below are five of his key predictions:
Mortgage applications will firm up. A very strong labor market and recent moderation in mortgage rates are contributing to an increase in mortgage applications.
An increasing number of young adults diving into homeownership. According to Freddie Mac’s first quarter mortgage data, first-time buyers made up 46% of its purchased loans, the largest share in recent history.
A continued shortage of housing supply. Compounded by factors such as lack of land, lack of construction labor and expensive lumber, the housing shortage is expected to remain in 2019.
Home sales will modestly increase. Khater anticipates stable economic growth and mortgage rates remaining below 5.25% will support a modest rise in home sales.
Homeownership rates will continue to recover. The rise in homeownership rates, concentrated among families earning less than the median income, will remain steady.