Freddie Mac Forecast 2013
Posted by Don Dutton at Dec. 19, 2012
Freddie Mac: What to Expect from Housing in 2013
Freddie Mac made suggestions on what housing might look like in 2013 in its December outlook report. Overall, the GSE expects to see a continuation of positive trends.
For one, property values should still rise into the next year and are likely to increase by 2 to 3 percent, Freddie Mac reported.
The market should also see more households, with household formation expected to expand from a net 1.20 million to 1.25 million.
Long-term mortgage rates, which have been hovering near record lows, are forecast to maintain this trend into the first half of next year, but then rise in the second half. The GSE says rates will still stay below 4 percent, however.
The outlook for the rental industry was positive as well. Aggregate vacancy rates for the multifamily and single-family for-sale market are projected to come down to 2002-2003 levels as household formation outpaces new construction,the GSE explained.
Originations are expected to fall by 15 percent as refinances slow down compared to 2012. On the other hand, multifamily lending is expected to grow by about 5 percent.
“The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive. This has been a big change from a year ago, when some analysts worried that the looming ‘shadow inventory’ would keep the housing sector mired in an economic depression,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery.”