CHICAGO -- With higher interest rates crimping mortgage originations, Fannie Mac has sharply lowered its projections for industrywide loan volume this year. The agency, however, remains bullish for the long term.

David W. Berson, vice president and chief economist for Fannie Mac, projects that mortgage originations will be about $716 billion this year and will fall slightly to about $700 billion the following year.

Last fall, the Federal National Mortgage Association had been projecting $850 billion in originations this year.

Long-Term Gains Predicted Speaking here at the National Real Estate Lending Conference sponsored by the Savings and Community Bankers of America, Mr. Berson predicted that originations would climb again in 1996 and stay high until the end of the decade.

Fueling the industry will be the large growth in immigration, more favorable demographic changes, and a surge in housing affordability.

"The demand for homes from immigrants in the next decade should be exceptionally strong," Mr. Berson told the Chicago audience.

Census figures show that the immigration should top more than eight million by the end of the decade, the highest levels since the turn of the century.

Citing the boom in immigration, Mr. Berson said the effects could be seen now and would grow more pronounced during the next 10 years.

"Much of the growth we are in fact seeing is coming from immigration," Mr. Berson said. "And the rate of home ownership after 10 years of being in this country grows dramatically."

Changing demographics are on the side of mortgage lenders as well, according to Mr. Berson, who projects a resurgence of homebuying from aging baby boomers who might have been outpriced during the previous decade:

A Fannie Mae study shows that home ownership in 1992 peaked among the growing segment of 45- to 64-year-olds in the country.

Buyers Are Back

While weak salary growth, high real interest rates, and high mortgage rates deterred homeownership during the 1980s, he said, many of those would-be buyers are back in the market today.

Mr. Berson added, however, that housing affordability would only rise moderately in the next few years. Calculations of affordability include home prices, mortgage rates, and median household income.

"Affordability will stay level or increase only slightly over the next 10 years," according to Mr. Berson.

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