Fannie, Freddie say housing market could see slight hiccup

Fannie Mae projects that mortgage originations will fall in 2021

National /
Apr.April 20, 2021 11:45 AM
Freddie Mac’s economists said the slowdown will be caused by a hike in mortgage rates and limits on housing supply. (iStock)

Freddie Mac’s economists said the slowdown will be caused by a hike in mortgage rates and limits on housing supply. (iStock)

The red-hot housing market could be heading for a slight slowdown, according to Fannie Mae and Freddie Mac.

Fannie Mae projects that mortgage originations will fall to $4 trillion this year from $4.5 trillion in 2020, Inman reported. Next year, the agency expects originations will drop even further to just below $3 trillion.

Freddie Mac, meanwhile, expects total originations to fall to $3.5 trillion in 2021. Most of this will be felt in refinancings, according to the agency.

Freddie Mac’s economists said the slowdown will be caused by a hike in mortgage rates and limits on housing supply, which may eventually lead to a slowdown in home prices. Those are projected to rise 6.6 percent this year before slowing to 4.4 percent in 2022, according to Freddie Mac.

“As the economy continues to improve, we expect conditions to remain generally favorable for the housing and mortgage market,” Freddie Mac chief economist Sam Khater said. “Higher mortgage rates have the potential, however, to dampen the robust demand we’ve been experiencing.”

The housing giants are bullish on the U.S. economy. Fannie Mae expects real GDP growth to be 6.8 percent, including 9.1 percent in the second quarter, as more people are vaccinated and states and cities ease restrictions.

[Inman] — Keith Larsen


Related Articles

arrow_forward_ios
Berkshire Hathaway HomeServices CEO Christy Budnick (Berkshire)
Berkshire Hathaway HomeServices names new CEO
Berkshire Hathaway HomeServices names new CEO
(iStock)
Hot, hot, hot: Resi market sets new price records in March
Hot, hot, hot: Resi market sets new price records in March
(iStock)
Homebuilder sentiment ticks up in April
Homebuilder sentiment ticks up in April
Andrew Florance, CEO of CoStar Group (CoStar, Homes.com)
CoStar to buy Homes.com for $156M
CoStar to buy Homes.com for $156M
(iStock)
Mortgage requests, refinancings continue to drop
Mortgage requests, refinancings continue to drop
Howard Hanna CEO Helen Hanna Casey and Compass CEO Robert Reffkin (Howard Hanna Casey, Getty)
Howard Hanna accuses Compass of poaching agents, stealing trade secrets
Howard Hanna accuses Compass of poaching agents, stealing trade secrets
The effective rate was 1.1 percent, on average, in 2020, down from 1.14 percent in 2019. (iStock)
Homeowners’ property taxes grew twice as fast last year
Homeowners’ property taxes grew twice as fast last year
HomeX founders Michael Lerner and Vincent Payen (HomeX)
HomeX nabs $90M to connect homeowners and repair techs
HomeX nabs $90M to connect homeowners and repair techs
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...