Freddie Mac’s most recent U.S. Economic and Housing Market Outlook takes a look at residential real estate at the year’s halfway point and forecasts what’s ahead for the second half of 2014. According to the outlook, the market for single-family homes has been operating at a slower-than-expected pace so far this year, with home sales still well below last year’s level. And though demand for home purchase applications has picked up with the start of the spring selling season, they are still down 13 percent year-over-year. Frank Nothaft, Freddie Mac’s vice president and chief economist, said while housing has been weaker than originally projected, the important question is how much further prices will have to rise before builders begin building more homes and more existing homeowners put their homes up for sale. According to Nothaft, as long as for-sale inventory remains tight, home prices are likely to continue rising through the end of the year. The increases should be smaller than last year’s but will affect affordability in the short term. Freddie Mac also expects mortgage rates to rise gradually during the second half of 2014, though they will remain well below historical norms. More here.