Despite expecting an economic slowdown as reflected in the gross domestic product (GDP), Freddie Mac published a pretty upbeat September forecast as the month, the third quarter, and the government’s fiscal year ended on Monday. The company’s Economic and Housing Research Group sees consumer confidence and housing helping to shore up less positive factors.
On the downside, the company expects that government spending, business investment, and net exports will all decline, pulling the GDP down from its average growth of 2.6 percent in the first half of the year to 1.9 percent in the last half, to an average of 2.2 percent for the full year. Growth will decelerate even further in 2020, to 1.8 percent. Growth will be maintained at that level partially because of strong consumer confidence which is expected to bolster consumer spending
Mortgage rates jumped in September but remain significantly lower than at the same point last year. Freddie Mac’s average for the 30-year fixed-rate mortgage was 3.64 percent for the week ending September 26th, down 1.08 percentage points from a year earlier. These rates have translated into a stronger housing market and both home sales and housing construction are firming. There should also be a noticeable increase in mortgage refinance originations in the coming quarters.