It's that time of year when we take stock. So let's look back at 5 key housing predictions for 2014. Did projections hit the target? And what do we think will happen in the year ahead?
Here's where we all got it right for 2014:
- People got more new mortgages than re-fi's — for the first time in 14 years.
- Still, the new mortgages are not enough to counter the big drop in re-fi's. The result? A large fall off in mortgage originations.
For 2015, Freddie Mac projects a further 8% drop in single-family mortgage originations.
- After big gains in 2013, many predicted that the rise in home values would slow. As expected, home values continued to increase, but at a more moderate pace.
For 2015, Freddie Mac expects further moderation in the rise of home values, to about 3%.
- The rental market had a very good year as expected. Vacancy rates fell to the lowest level since 2000, and developers began construction on the largest number of rental apartments in 25 years.
Here's where projections didn’t hit the mark:
Many of us expected mortgage rates to inch up. But in fact, fixed-rates are now lower than they were a year ago.
In 2015? Freddie Mac expects rates to increase gradually.
Overall in 2015, Freddie Mac expects economic growth to be about 3%. We predict there will be more new jobs, and that incomes will rise along with housing starts and home sales (up about 4%). Long-term mortgage rates are likely to drift higher, but with fixed-rate mortgages staying below 5%.
Read our December U.S. Economic and Housing Market Outlook to learn more.
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