Banks and thrifts, exploiting their deposit bases to offer teaser introductory rates, will maintain in 1995 the gains in market share that they took from mortgage banks this year, the Mortgage Bankers Association predicts.

MBA economists also forecast:

Mortgage loan originations will slide to $605 billion in 1995 from about $760 billion this year.

Adjustable-rate mortgages will account for about 45% of all loans next year, up from an average of 32% for 1994.

Long-term interest rates will rise by half a percentage point, to 8.5% to 9%, by the end of 1995, while short-term rates will climb 1.5 to 2 percentage points over the same period.

The rate for 30-year fixed-rate mortgages should rise to about 9.8% by the fourth quarter of 1995and possibly could break into double digits.

The Federal Reserve will increase the discount rate by half a percentage point around Nov. 1 and by another half point in December.

Its pretty easy to forecast a lousy lending climate [for mortgage bankers] for the next 12 months, said David Lereah, the MBAs chief economist.

Lereah said the fact mortgage rates have risen two percentage points since February has produced a schizophrenic market for 1994. During the first half, he said, a phenomenal $474 billion worth of home loans were originated, and mortgage banks accounted for between 58% and 52% of them. But then the rate hikes kicked in and the refinancing market evaporated. Lereah estimates only about $286 billion worth of loans will be originated during the second half. Of those, mortgage banks will generate no more than 50%.For 1995, He forecasts a market share of 47% to 48%

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