A Year-End Look At Past Predictions

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At the beginning of every year, experts and analysts make predictions about what the year will hold for the real estate market. From home sales to mortgage rates, there are many forecasts predicting what will be in store for buyers and sellers over the course of the year but not as many reviews of whether those forecasts were right or wrong once the year is through. Freddie Mac’s chief economist, Frank Nothaft, is one of the few willing to test his predictions against the year-end totals. In a recent analysis, Nothaft found that many of Freddie Mac’s key projections turned out to be more right than wrong this year. For example, they projected that home prices would continue to increase, but at a slower pace than in 2013. And, as expected, there was a significant slowing from the rapid price gains seen the year before. They also projected that that mortgage market would tilt toward home purchases after a drop in refinance activity, which was also accurate. Mortgage rates, on the other hand, were forecast to rise in 2014 when, in fact, they moved lower – even hitting calendar-year lows early in December. Home sales were also forecast to improve from the year before but, due to unexpected economic volatility and unseasonably rough winter weather during the first quarter, home sales started the year slow and will come in 500,000 short of Freddie Mac’s projection. More here.

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