Low mortgage rates and strong job growth are giving the housing market one of its best years in decades—even as overall economic growth has weakened—according to Freddie Mac’s monthly Outlook report for May. The report’s optimism is a change from the mortgage giant’s previous predictions, when economists said the housing market likely would not perform as well as it did in 2016.
New-home sales in March were better than expected, and existing-home sales that month rose to the highest level since 2007. Now Freddie economists expect home sales to top 6 million in 2017. “Despite weak economic growth, housing got off to a good start in 2017 because low mortgage rates have given the spring homebuying season a pleasant surprise,” says Sean Becketti, Freddie Mac’s chief economist.