The most recent monthly economic outlook from Fannie Mae shoes that home sales in the US are expected to see big gains. According to the funding experts, their predictions for market gains will occur within the next two years.
Economists at Fannie Mae have predicted that the sales of existing homes in the US will increase by 10.5 percent by the end of 2013. By 2014, sales are expected to increase by 6.2 percent. Sales in the single-family home market are predicted to increase 15.1 by the end of 2013, and 44.1 percent by the end of next year.
According to the report, home prices are expected to increase at the rate of the current housing recovery. This will have a huge impact on boosting the net worth of US homes. The amount of homeowners who are underwater borrowers is expected to diminish gradually, while reducing strategic default incentives.
Fannie Mae Mortgage Rate Predictions
Fannie Mae made another prediction related to mortgage rates. They believe these rates will remain at record-low averages throughout 2013. However, 30-year fixed-rate mortgages will continue increasing. During the first quarter of 2013, the average was 3.5 percent. This average is expected to increase to 4 percent by the last quarter of 2013. The mortgage rate prediction for the last quarter of 2014? It’s during this time that the rates are projected to increase by an average of 4.5 percent.
The amount of homebuyer mortgage applications is also expected to increase this year by 16.8 percent. By 2014, the amount of applications should increase by 17.1 percent. However, Fannie Mae is predicting that decline in the number of refinancing applications will more than likely cause the amount of mortgage loan originations to decrease by 14.5 percent in 2012, and 31.4 percent next year.