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Housing to stay strong in Q1
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January 20, 1999: 5:38 p.m. ET
Freddie Mac predicts market will remain healthy, profitable in early 1999
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NEW YORK (CNNfn) - The strong U.S. housing market apparently won't be showing any signs of weakness soon. While first-quarter housing activity should begin to slow, sales will remain strong and profitable, mortgage firm Freddie Mac said Wednesday.
Economists at Freddie Mac predict house prices will continue to rise 4 to 4.5 percent this year, despite predictions that the overall economy will ease to a moderate growth rate of 2 to 2.5 percent.
1998 was a record setting year for mortgage lenders and few expect those numbers to be topped this year. Still, says Robert Van Order, chief economist for Freddie Mac, the year will be a good one.
"Mortgage originations will fall to about $1.1 trillion in 1999, but that would still make it the second-highest level of originations in history," he said.
Refinancings, which comprised 60 percent of last year's mortgage loans, are expected to slow as that market cools. Freddie Mac predicts refinance originations will fall to just 25 percent of the market by the end of 1999.
Also falling out of favor will be adjustable rate mortgages, or ARMs, which have steadily been losing popularity as 30- and 15-year fixed loans have hit record lows in 1998.
"The ARM share of the market is presently 10 percent and should remain at or below that level throughout 1999," said Van Order. 
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