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Homeowners Should Skip Christmas Shopping And Go Mortgage Hunting

Homeowners should forget about shopping for Christmas bargains and start mortgage hunting now to lock in the best late 2019 loan deals.

Housing experts say now may be the best time in months to buy a home or condominium at a good price and finance it with a loan carrying an interest rate around 3.8%.

According to a new forecast by Freddie Mac, mortgage rates should stay that low for the rest of this year and well beyond that.

In Freddie Mac’s newest housing market forecast, the company’s economic and housing research group states that they expect benchmark 30-year-fixed mortgage rates to remain around 3.8% for the rest of 2019 and stay at that level for all of 2020 and 2021.

“The economy has seen increased volatility in November as hopes for a favorable resolution to the trade dispute have recently waned,” said Sam Khater, Freddie Mac’s chief economist. “However, given low interest rates, modest inflation and a solid labor market, the U.S. housing market continues to stand firm, and, our forecast is for the housing market to maintain momentum over the next two years.”

On December 5th, Freddie Mac’s Primary Mortgage Market Survey reported that benchmark 30-year fixed home-loans averaged 3.68% nationwide. A year ago, the 30-year fixed loan averaged was 4.75%.

Experts say this year’s unexpectedly low mortgage rates have sparked a tsunami wave in refinancing, as well as a surge in home purchases. A recent forecast from the Mortgage Bankers Association shows that 2019 is expected to be the best year for refinancing since 2016, and the best year for purchase mortgages since 2006.

The Freddie Mac report predicts the good times to keep rolling. In its latest forecast, the government-sponsored enterprise sees a whopping $846 billion in refinance originations this year, and $834 billion more in refinancing activity in 2020.

Both of those projections would be more than $300 billion more in refinancing activity than was accomplished in 2018.

What’s the outlook for home buying in 2019, 2020 and 2021? Freddie Mac expects there to be $1.255 trillion in purchase originations for home loans this year. And those figures are expected to rise in both 2020 and 2021.

According to Freddie Mac, it expects there to be $1.299 trillion in purchase originations in 2020 and $1.369 trillion in purchase originations in 2021.

Overall home sales are also expected to rise in each of the next two years. Freddie Mac is forecasting 6 million home sales in 2019, a hefty 6.1 million units sold in 2020, and a whopping 6.2 million going under contract in 2021.

Despite home sales and purchase originations projected to rise over the next few years, Freddie Mac currently expects 2021 to see a decline in total mortgage volume from 2020’s expected level due to a decline in refinancing.

The forecast surprisingly sees only $429 billion in refinancing in 2021. The reason? By then, there simply will not be that many homeowners left who have not refinanced their mortgage by then, especially if home-loan interest rates stay as low as they are currently expected to.

Overall, Freddie Mac expects there to be $2.101 trillion in total mortgage originations in 2019, a whopping $2.132 trillion in originations in 2020, and only $1.798 trillion in 2021.

Unfortunately for home sellers, Freddie Mac also expects home price growth to slow over the next few years, with annual growth rates of 3.2% in 2019, some 2.9% in 2020, and only 2.1% 2021.

Holiday loan closings affordable

According to an ATTOM Data Solutions analysis, buyers willing to close on a home purchase the day after Christmas realize the biggest discounts below full market value of any day in the year.

This analysis of more than 23 million single-family home and condominium sales over the past six years is evidence of the continuation of a hot sellers’ market in many sections of the U.S.

“Closing on a home purchase the day after Christmas or on New Year’s Eve can be one of the most financially beneficial holiday-season gifts you can get,” said Todd Teta, chief product officer with ATTOM Data Solutions.

“While lots of folks are shopping the day-after Christmas sales or getting ready to ring in the New Year, our data shows that buyers and investors are buying homes on those days at a discount. That’s a far cry from buying during June, when they are likely paying about a 7% price premium.”

Best months to buy a home

The analysis also looked at best months to buy at the national level. Nationally, while December is considered the best month to buy overall, there is still about a 1.2% premium.

However, you can expect to pay higher premiums if you plan on purchasing in the summer, with the month of June having the highest premium at 7.1%.

For more housing news, visit Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit

“The book is Escaping Condo Jail by Sara Benson and Don DeBat. I would say that anybody thinking about buying a condo, or even anybody serving on a condo board, or anybody who has any connection to a condo, this is must reading—all 600 and something pages. Thanks a lot for a great book!”


Steve Sanders, “Your Money Matters” WGN TV, December 22, 2014

By Don DeBat

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