Refinancings will drop 52% and purchase mortgage volume will drop 5% this year, the market research firm iEmergent Inc. said Monday.

The Des Moines firm predicted total volume of $1.09 trillion to $1.2 trillion for this year. More than one-third of U.S. households are no longer in the homebuyer pool, which is now at levels lower that those experienced in the early 1990s.

If the high end of its estimate is reached, iEmergent predicts a 49% refi/51% purchase market share split for this year, with purchase volume of $557 billion and refi volume of $531 billion to $643 billion.

Dennis Hedlund, iEmergent's president, said current elevated loan volumes are unsustainable as consumers are saving more and are worried about their jobs. Lenders that relied heavily on refis last year will face considerable risk for their business this year and next.

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