New Forecast Sees Decline, Then Growth In Mortgages
WASHINGTON – The Mortgage Bankers Association is projecting that mortgage originations will fall from an estimated $1.4 trillion in 2010 to slightly less than $1 trillion in 2011.
The drop, according to MBA, will be driven by a decline in refinance originations, but the industry will see an increase in purchase originations. “The increase in purchase originations will be driven by modest increases in home sales and stabilizing home prices,” MBA said. “In contrast, refinance originations are expected to fall steadily as mortgage rates gradually increase throughout 2011 and 2012.”
The MBA also is forecasting that fixed mortgage rates will increase to 5.1% by the end of 2011, and head towards 5.7% in 2012; that existing home sales will increase modestly in 2011, increasing by a little less than 2% before increasing by about 16% in 2012; and that new home sales will begin a slow recovery in 2011, increasing around 20% from a low base, and then increasing 40% in 2012 as markets recover.