Freddie Mac is projecting smooth sailing for the U.S. real estate economy, according to its 2018 Economic Research Outlook released last week.

Year-to-date 2017 home sales are the highest they’ve been since 2007 and next year is expected to be even better, according to the report. Freddie Mac economists say existing home sales will remain flat and the growth will come largely from new home sales.

The GSE predicts home sales prices will increase 4.9 percent in 2018 and mortgage interest rates will be around 4.4 percent.

As interest rates drift upward, the mortgage market is expected to remain purchase oriented. Refinance activity will likely decline even as homeowners are expected to take advantage of rising values by tapping into the equity of their homes.

“Even if rates remain flat, 30-year conventional rate refinance potential next year will be the lowest it has been in years,” the report said.

Freddie Mac’s full 2018 outlook can be seen here.