After last night’s news that the Mortgage Bankers Association expects mortgage originations will shrink, the trade group closed it’s conference with a bright explanation.

“We do expect refis will fall off,” explained Michael Fratantoni, MBA chief economist during the final general session. However, that’s one of the few negatives.

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.

The MBA still expects jobs to increase and the American economy to grow around the 2% range, Fratantoni added. Plus, interest rates will also likely rise next year as well.

“The big picture here is slow, global growth” he said, about rates staying low. As global investors continue a “flight to quality,” Fratantoni said, putting money into 10-year Treasurys, interest rates will stay compressed.

So even if the Federal Reserve abandons its zero interest rate policy, which many here expect, with the consensus being March 2016, Fratantoni indicates rates won’t rise exponentially.

“Spending on housing, residential investment will be a real contributor to the economy,” he added, describing housing as a “real driver” to the nation’s economic health.