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After four years and a lot of rollercoaster rides, the mortgage originations market is zeroing in on the 2 trillion dollar mark, according to Freddie Mac’s August 2016 Outlook report. Freddie Mac credited the balance between low interest rates and solid home sales as signs of an improving originations sector. Unlike in 2012, however, when the market was driven largely by refinances, today's market is nearly 50/50 balanced between home refinances and purchases.
Mortgage rates, expected to stay below 4 percent into 2017, and more optimistic expectations for home sales of 6 point 04 million, the highest number this decade, are Freddie Mac’s main leg on which to stand with its enthusiasm. The GSE expects strong home sales to boost 2016 forecasted mortgage originations by 175 billion dollars over July’s forecast, and for housing construction to remain on an upward trend‒‒1 point 2 million and 1 point 4 million for 2016 and 2017, respectively.
A weak GDP report for the advance Q2 estimate did not deter builder sentiment for August, according to the National Association of Home Builders. Builders’ confidence in the market for newly-build single-family homes picked up from July to August, rising up to 60—an improvement of two points over July’s downwardly revised reading of 58, according to the NAHB/Wells Fargo Housing Market Index for August released Monday.
