MBA: Overall mortgage originations will fall 35.5% from 2021 to $2.58T this year but higher home prices will help fuel a smaller 4% annual growth in volume.
WASHINGTON – With swiftly rising mortgage rates making homeownership more expensive to achieve, the Mortgage Bankers Association (MBA) forecasts that overall mortgage originations will fall 35.5% from 2021 to $2.58 trillion this year.
MBA’s previous forecast was for $2.61 trillion. MBA reports that refinance applications fell 5% last week from the previous week and 62% year-over-year. The refinance share of mortgage activity dropped to 37.1% of total applications from 38.8% the prior week. MBA expects refinances to decline 64% for 2022.
Meanwhile, the group expects purchase originations to rise to a record $1.72 trillion this year, down from its previous forecast of $1.77 trillion.
“Even though existing sales volume will be slightly lower than last year, the continued growth in new home sales and the rapid rise in home prices should deliver a smaller, but solid, 4% annual growth in purchase origination volume,” said MBA chief economist Michael Fratantoni.
Purchase applications edged up just 1% last week from the previous week but were down 6% from the same week a year ago. Adjustable-rate mortgages, which carry lower rates, accounted for 7.4% of applications last week, the highest level since June 2019.
MBA economist Joel Kan said, “In a promising sign of strong purchase demand amidst affordability challenges, both conventional and government purchase applications increased.”
Source: CNBC (04/13/22) Olick, Diana
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