Fannie Mae Tuesday predicted that the economy will cool next year as consumer spending slows, but mortgage activity will remain strong because of refinancing.

Mortgage markets are likely to "continue to power ahead at levels that are quite outstanding," David Berson, vice president and chief economist said at an annual presentation on the outlook for the economy and mortgage markets.

Originations are expected to increase 6.5% next year to $878 billion, despite modestly slowing home sales.

Mr. Berson predicted strong homebuying in California, the Pacific Northwest, Arizona, Colorado, Idaho, Georgia, and North Carolina.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.