MortgagePolitics & MoneyReal Estate

MBA lowers rate forecast and boosts lending outlook

Mortgage Bankers group predicts mortgage originations will gain 15% from last year

Mortgage Bankers Association issued a new forecast that predicts the U.S. rate for a 30-year fixed mortgage will average 3.7% in the third and fourth quarters of  2019, down from the 3.9% the group predicted for the same periods a month ago. 

Lower mortgage rates will boost loan originations 15% compared to last year, according to the forecast issued on Friday. Mortgage originations probably will total $1.86 trillion in 2019, MBA said. Last month, it called for $1.79 trillion. In 2018, mortgage volume was $1.64 trillion.

The refinancing share probably will be 33% in 2019, MBA said. That’s up from the 30% it projected last month.

Home prices probably will grow 4.7% in 2019, a slower pace than 2018’s 6%, MBA said. Sales of existing homes probably will increase by 0.3% to 5.357 million from 5.341 million in 2018, the group said. New-home sales likely will gain 7.5% to 663,000 from 617,000 last year.

In addition to its mortgage forecast, MBA issued a slate of economic projections. Economic growth probably will slow to 1.7% in the fourth quarter, from a 3.1% pace in the first three months of 2019, MBA said. 

Consumer spending probably will increase by 2.7% in 2019, compared with 1.6% last year. And, inflation should remain tame. MBA projected consumer prices probably will grow 1.9% this year, a slower pace than 2018’s 2.4%. 

The unemployment rate probably will average 3.7% in 2019, MBA said. That’s down from the 3.8% it was calling for a month ago. For 2020, the unemployment rate probably will be 4.1%, matching the rate it projected a month ago.

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