The average rate on a 30-year, fixed-rate mortgage could hit 2.9% in 2021, according to Fannie Mae's April housing forecast!
The housing market growth with the current situation is unknown; however, mortgage rates and a desire for more space could drive our market up. After all, would you rather a few hundred cows within a mile radius or a few hundred people?
The forecasted low-interest rates for 2021 also predict a significant uptick in mortgage originations. The forecast is calling for purchase and refinance originations above 2019 levels in 2021.
The forecast anticipates, overall, a 3.1 percent contraction in real gross domestic product, followed by a rebound of 4.8 percent in 2021.
“The historically rapid decline in economic activity, the accompanying employment loss, and our limited, though improving, understanding of COVID-19 make this a particularly challenging forecast environment,” Duncan said.
“The variability around this forecast is wide, and is dependent on the incidence, severity, and duration of the virus, as well as the response of the public and policymakers to new information,” Duncan added. “In the background and contributing to the economic stress is the drop-off in demand and the negotiations over supply constraints in the oil industry.”