“The housing market continues to rise, supporting a further stagnant economy that has lost momentum in recent months,” said Sam Khater, Freddie Mac’s chief economist.
He noted that record low mortgage rates have pushed many potential buyers off the sidelines. “The demand for purchases is showing no real signs of slowing down to next year,” he said.
But the low rates also make it much more difficult for buyers to find a home.
“Buyers with a keen eye on getting a home during the holiday season are likely to struggle – both to find a home that ticks all the boxes and to win in a competitive market,” said Danielle Hale, chief economist at Realtor .com.
Still, she said, surging buyer demand keeps home sales at their highest pace in more than 15 years.
According to the Mortgage Bankers Association, applications for purchases are up 26% from a year ago and refinances are up 105% from this time last year.
“The continued strength in the housing market has penetrated into December,” said Joel Kan, MBA’s associate vice president of Economic and Industry Forecasting. “Home purchase requests increased for the fourth time in five weeks as both conventional and government segments posted gains.”