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September 25th, 2017 · No Comments · California Real Estate, Montecito Homes For Sale, Santa Barbara Homes For Sale, Santa Barbara Real Estate

MODEST HOME SALES, PRICE GAINS EXPECTED NEXT YEAR
The national housing inventory crunch is not expected to ease in the coming year, though more new homes should help spur a slight uptick in sales.
In its 2018 Outlook, Freddie Mac projects 6.30 million home sales in 2018, up from an expected 6.18 million this year, which would be the most in a decade. That 2 percent increase will largely be driven by sales of new homes, as sales of existing homes are unlikely to grow due in part to aging-in-place trends.

Freddie Mac expects home price growth to cool slightly next year, from a projected 6.3 percent in 2017 to 4.9 percent. Those projections line up almost exactly with the latest numbers from economists at John Burns Real Estate Consulting, which predicts 6.0 percent appreciation this year and 4.9 percent next year.

Both Freddie Mac and JBREC also have identical projections as to where 30-year, fixed-rate mortgages will be by the end of 2018: 4.4 percent. Freddie Mac projects that rising interest rates will cause refinancing activity to decline to 25 percent of the market by next year, its lowest level since 1990.

MORTGAGE RATES RISE AFTER PROLONGED DECLINES
Mortgage rates have risen for the first time in seven weeks, and more increases are likely on their way later this year.

Freddie Mac says that 30-year, fixed-rate mortgages averaged 3.83 percent for the week ended Sept. 21, up from 3.78 percent the previous week. Fifteen-year, fixed-rate mortgages also saw a 0.5 percent weekly increase, rising to 3.13 percent.

While mortgage rates remain low by historic standards, the Federal Reserve signaled last week that it would raise interest rates one more time in 2017, most likely in December.

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