For those who believe the market for mortgage originations is growing at a healthy clip, the Mortgage Bankers Association just shared some bad news.

During a press conference at its annual meeting being held right now in San Diego, the MBA said it expects a 10% increase in purchase mortgage originations next year compared to 2015.

While the MBA estimates purchase mortgage originations to reach $905 billion, refinance originations are predicted to decrease by one-third, resulting in refinance mortgage originations of $415 billion.

On net, mortgage originations will decrease to $1.32 trillion in 2016 from $1.45 trillion in 2015. And it gets even worse from there.

Looking further ahead, for 2017 MBA is forecasting purchase originations of $978 billion and refinance originations of $331 billion for a total of $1.31 trillion.

As for why they expect growth in purchase mortgages, Michael Fratantoni, chief economist and senior vice president of research and industry technology with the MBA, attributed it to a mixture of factors, including a growing demand in households from renting and mortgage finance options.

“We are projecting that home purchase originations will increase in 2016 as the US housing market continues on its path towards more typical levels of turnover based on steadily rising demand and improvements in the supply of homes for sale and under construction,” said Fratantoni.

Meanwhile, the MBA forecasts that the Federal Reserve will increase interest rates in December.

However, Fratantoni noted with it’s an odd situation right now with the Fed and believes there is only a 50% to 60% of this happening in December.  

About the Author

Most Popular Articles

Housing market flashing recession signal

The housing market is signaling there will be an economic recession by the 2020 election, according to Benn Steil, director of international economics at the Council on Foreign Relations.

Oct 11, 2019 By

Latest Articles

Foreclosure activity drops to lowest level since 2005

Foreclosure activity sank in the third quarter of 2019, dropping to the lowest level in nearly 15 years, according to the latest report from ATTOM Data Solutions. Foreclosure activity in the third quarter fell 19% from a year ago to the lowest level since the second quarter of 2005, a 13-year low.

Oct 16, 2019 By