Mortgage Bankers Association Forecasts Record Purchase Origination
(Bloomberg) -- The Mortgage Bankers Association forecasts that 2021 will bring a record amount of home purchase origination to the bond market.
A combination of strong demand, an improving economy and still low lending rates will be the driving forces behind the surge, Mike Fratantoni, MBA’s senior vice president and chief economist, said at its Spring Conference and Expo 2021 today.
The primary obstacle to even higher purchase origination is the scarcity of homes available for sale. “A lack of supply is the biggest hurdle to an even larger increase in home sales,” Fratantoni added.
The association forecasts overall mortgage origination to fall 14% this year to $3.28 trillion from the $3.83 trillion record seen in 2020, driven by a decline in home owner refinancing, as the MBA expects mortgage rates to rise to around 3.7%. They expect refinance originations to drop 33% to $1.62 trillion.
The 30-year mortgage rate has fallen three weeks in a row to 2.97%, its lowest since February, according to a Freddie Mac release this morning.
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