Freddie Mac says it expects mortgage rates to hover around 4% through mid-2015, and while there are some of the positive tailwinds buoying the economy at the start of the year, some may not stick around for long.

Expect mortgage rates to remain around 4% for the first two quarters of the year as long as uncertainty in foreign markets continues to result in a flight to safety into U.S. Treasury long-term bonds, the GSE reports.

"On balance there are a lot of positive opportunities in the U.S. economy at the start of the year, and the real question is whether or not households and businesses will be able to seize these opportunities and make the most of them. The reprieve in interest rates and drop in gas prices should help to spur economic growth,” says Frank Nothaft, Freddie Mac vice president and chief economist. “Until rates start to rise later in the year, housing markets should respond positively and we anticipate increases in home sales and continued improvement in construction activity. With rates lower at the beginning of the year, we'll see higher than expected refinance volumes as well."

Freddie also says that among conventional 30-year fixed mortgage agency MBS, there are $361 billion with a 4.5% coupon and an additional $479 billion with a MBS coupon of greater than 4.5%. 

“Many of the mortgage loans in the pools underlying those MBS would have an interest rate of 5% or higher, giving the borrowers a strong incentive to refinance at today's rates,” according to Freddie.

Due to lower than expected mortgage rates, the refinance share has been adjusted higher by 9% with much of the increase attributed to the boost from refinance activity.

“We expect house price appreciation to increase to a 3.5% rate annualized for 2015, a 0.5 percentage point increase over last month,” the company says. “As labor markets tighten, expect wage growth to pick up. For example, the National Federation's Independent Business Index for December shows most small businesses expect to increase employee compensation to the highest level since 2006.”