Freddie Mac released its U.S. Economic and Housing Market Outlook for May, revealing that low mortgage rates kept affordability high in the first quarter of this year for buyers, but housing markets probably will see interest rates increase for the rest of the year. The outlook credits market participants attempting to anticipate the Federal Reserve's timing around rising short term interest rates will likely be the cause of the increase.
Weak first quarter data brought the forecast for economic growth for 2015 from 2.6 percent to 2.3 percent. With tight for-sale inventories, house price growth continues to beat expectations. Expect 2015 house price growth to be 4.5 percent, revised up from 4 percent last month. Due to strong refinance activity through the first four months of the year, the forecast for 2015 mortgage originations has been revised up to $1.35 billion. Due to low mortgage rates and strong refinance volume, the forecast for the refinance share of originations in 2015 has been boosted to 43 percent.
The U.S. House of Representatives Committee on Financial Services: Housing and Insurance Subcommittee held a hearing today called The Future of Housing in America: Oversight of the Rural Housing Service, according to a memorandum written by the FSC majority staff. The hearing was intended to provide members with the chance to receive information from the Rural Housing Service on its budget priorities for fiscal year 2016, the agency’s overall performance, and its future goals and challenges.