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Mortgage rates cast shadow on 2017 housing outlook

Posted by The Aramco Group on Thu, Feb 9, 2017 @ 14:02 PM

The housing market looks to continue its trend of growth and recovery in 2017 but cautious optimism seems to be the sentiment among industry insiders. According to Freddie Mac's latest 2017 Outlook report on the housing market, uncertainty as to what lies in store for the mortgage market this year may cause growth to taper compared to last year.

"We must grapple with uncertainty about fiscal policy, foreign investments in U.S. real estate, and the size of the mortgage market," said Sean Becketti, chief economist at Freddie Mac. "Among the many uncertainties we highlighted, however, a smaller mortgage market in 2017 than 2016 seems most certain."

The report anticipates mortgage rates to climb in the coming months resulting in a slowdown in overall housing activity. In particular, the refinance market is expected to decline the sharpest as refinances tend to be among the most rate sensitive products for consumers.

In the meantime, mortgage rates are relatively low with conforming no-point 30-year fixed mortgage rates are averaging 4.25 percent while 15-year rates are near 3.375 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.