The cheapest mortgage rates since 2016 will push U.S. mortgage originations to a three year-high this year, according to a forecast by Mortgage Bankers Association.
Combined purchase and refinancing originations will probably total $1.9 trillion in 2019, according to MBA. That would be the highest level since 2016’s $2 trillion.
The average U.S. rate for a 30-year fixed mortgage probably will be 3.8% this year, the lowest since 3.6% in 2016, MBA said. Last year, the rate was 4.8%. The refinancing share of lending in 2019 probably will be 35%, MBA said. That’s up from a month ago when the group forecast a 33% share.
The MBA’s projections echo those made recently by Fannie Mae, which stated last week that it expects refinances to climb to a three-year high this year.
Sales of existing homes probably will total 5.39 million, up from 5.34 million last year, the trade group said. New-home sales probably will reach 660,000, up from 617,000 in 2019, MBA said.
Home prices probably will gain 4.3% from last year, the group said. That’s a slower pace than the 6.1% annual increase in 2018. MBA bases its home-price forecast on the Federal Housing Finance Agency’s index that measures sales of single-family homes with mortgages backed by Fannie Mae and Freddie Mac.
The homebuilding industry will have the highest output in more than a decade, according to the forecast. Builders will break ground on 876,000 new single-family homes, up from 873,000 last year, MBA said. That would be the most since 2007, according to data from the Department of Commerce.
