The economy is improving, homebuyer demand remains strong and COVID-era restrictions are easing, but mortgage giants Fannie Mae and Freddie Mac each predicted a slowdown in the housing market as mortgage originations decrease in 2021. 

Fannie Mae revised its forecast down to predict mortgage originations will drop from 4.5 trillion in 2020 to just under 4 trillion this year and to just under 3 trillion in 2022. Freddie Mac’s forecast was even lower, stating that because higher mortgage rates have the potential to dampen the robust demand the housing market has been experiencing, it forecasts total originations to decline to $3.5 trillion in 2021. 

Fannie Mae stated that while housing demand remains strong, the ESR Group revised its annual home sales forecast slightly downward due to continued supply constraints and a modestly higher outlook for mortgage rates. Even so, it forecasted that much of the…

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