Low mortgage rates will push home lending this year to a 12-year high of $2.07 trillion, the Mortgage Bankers Association said in a forecast.
The volume for mortgages to purchase homes probably will total $1.27 trillion, the highest since the peak of the housing bubble in 2006, according to the group’s Nov. 20 forecast.
Refinancing probably will reach $796 billion, the most since 2016, MBA said.
Mortgage rates unexpectedly tumbled for the first nine months of 2019 as a slowing economy sent investors flocking to bonds. The monthly average rate for a 30-year fixed mortgage dropped to 3.61% in September before rising eight basis points in October, according to Freddie Mac data.
Even at 3.69%, the October rate is more than a percentage point lower than a year earlier.
Sales of existing homes probably will total 5.36 million in 2019, up from 5.34 million last year, the trade group said. New-home sales probably will reach 681,000, up from 615,000 in 2018, MBA said.
The average U.S. rate for a 30-year fixed mortgage likely will remain low at 3.7% in 2019 and 2020, the trade group said. That’s more than a percentage point lower than the 4.8% average in 2018, MBA said.
Home prices probably will gain 4.3% in 2019 from a year earlier, 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 this year will have the highest output in more than a decade, according to the forecast. Builders probably will break ground on 878,000 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.