MCLEAN, VA--(Marketwired - Apr 17, 2014) - Freddie Mac (
- Projecting new home construction to increase by 18 percent, and house price appreciation moderating to an annual growth of 5 percent in 2014.
- Lowering home sales projection from 5.6 million to 5.5 for 2014 primarily due to a slower than normal first two months of the year, which has resulted in a 4 percent reduction in annual originations.
- The housing market is being helped by an improving local employment picture. All 50 states saw declining unemployment rates, with 18 states experiencing at least a half percentage point reduction in their unemployment rate over the previous three months ending in February.
- Following the spike in interest rates last summer consumer confidence had dipped a bit, but it is now tracking higher and in March was at the highest level since January 2008.
- Expect the the 30-year fixed-rate mortgage to continue its path of gradually rising higher and ending the year around 5 percent.
Attributed to Frank Nothaft, Freddie Mac vice president and chief economist:
"We're getting mixed signals as we start the spring home buying season. Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected. This is good news for those markets that have room to run on the house price appreciation front, but it's also going to increase the affordability pinch in many markets, especially along the country's east and west coasts. Two indicators that are supporting local housing activity are rising consumer confidence and declining unemployment rates."
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is one of the largest sources of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.