Latest Home Sales and Residential Lending forecasts

Each month Fannie Mae and the MBA forecast interest rates, residential lending, and both existing and new home sales. Freddie Mac does a quarterly forecast covering lending, interest rates and total home sales – existing plus new. The following tables summarize the latest forecasts as of June 2020.

Interest Rates

Differing expectations of interest rates drives the variations expected in these forecasts for refinance volume and ultimately home sales. While both Fannie Mae and Freddie Mac see declining rates, Fannie Mae expects the largest decline. MBA is the contrarian for now seeing rates rise slightly in 2021. Freddie Mac’s weekly Primary Mortgage Market Survey came in today at 3.13 percent -- an all-time record low.

Existing Home Sales & Median Prices

While the MBA sees almost no change in existing home sales in 2020, Fannie Mae forecasts an 11.4 percent decline. Both Fannie Mae and the MBA see 2021 existing home sales rise in the 8 percent range.

New Home Sales & Median Prices

The only real deviation in new home sales forecast between Fannie Mae and the MBA is in 2021, with the MBA seeing a more optimistic 6.1 percent gain from the prior year while Fannie Mae forecasts a 3.0 percent decline.

Residential Lending

Differences in assumed home sales and interest rates explain the variations in lending expectations. The all-time lending volume was $3.76 trillion in 2003, with refinance volume totaling $2.598 trillion. Record purchase lending volume was $1.55 trillion in 2005 – due to the housing bubble.

Employment levels will have an impact on these forecasts.