Freddie Sees Slowing 4Q Home Sales and Originations

Home sales will edge down in the fourth quarter as inventories remain tight and new construction activity remains severely depressed, Freddie Macs latest economic outlook report says.

Over the next couple of months expect rates to hover around 4.3% and begin heading higher in 2014, according to Freddie chief economist Frank Nothaft.

The chief economists forecast calls for a 12.5% decline in mortgage originations from $400 billion in the third quarter to $350 billion in the fourth quarter.

The housing market has cooled off in the past few months as rising mortgage rates dampened demand heading into the fall, according to Freddie Mac economist.

However, home sales and mortgage originations will revive in the first half of 2014.

The housing recovery keeps chugging along despite a constant barrage of disruptions to the broader economy. We’re likely going to see the housing recovery slow down, but not shut down, as we close out the rest of this year due to tight inventories in many markets, rising mortgage rates and slumping consumer confidence, Nothaft says.

Fortunately, the housing recovery should continue to absorb the economic shocks in stride and improve next year.”

Article source: http://www.nationalmortgagenews.com/dailybriefing/Freddie-Slowing-fourth-quarter-Home-Sales-Originations-1039517-1.html

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