Highlights from this article:
- A mortgage industry forecast for 2020 predicts a slight drop in originations.
- But overall, 2020 is expected to be a good year for lenders in the U.S.
- Rates are expected to remain low over the coming months.
- Purchase loans will likely continue to dominate the market.
- Learn more about these and other predictions below.
The latest mortgage industry outlook from Freddie Mac suggests that 2020 could be another solid year for the lending industry. Low mortgage rates and generally favorable economic conditions are expected to increase home sales in 2020, compared to 2019.
In September 2019, Freddie Mac published its latest economic and housing market forecast with predictions extending through 2020. Among other things, they issued several positive predictions for the mortgage industry next year.
Here’s a recap of the key points from their outlook, along with some supporting data and commentary.
Positive Outlook for Mortgage Industry in 2020
As of late October 2019, mortgage rates were still down considerably from the same month a year earlier. That, along with other factors, could boost U.S. home sales and construction through the end of 2019 and into 2020.
A strong job market and consumer confidence are helping as well. Unemployment collection is currently near its lowest level since the 1970s, and jobless claims are also hovering at historical lows as of fall 2019.
All of these factors (including low mortgage rates and a strong job market) have contributed to Freddie Mac’s mostly positive prediction for the mortgage industry in 2020.
The group expects total origination volume to hit $2.1 trillion in 2019 (by the end of the year), followed by a slight decline to $1.8 trillion in 2020. The chart below shows purchase and refinance origination volume over the past few years, with a forecast for 2020.
