Skip to main content

MBA Forecasts Originations to Hit $1.2 Trillion in 2019

NationalMortgageProfessional.com
Oct 16, 2018
The Mortgage Bankers Association (MBA) has announced that it expects to see $1.24 trillion in purchase mortgage originations in 2019

The Mortgage Bankers Association (MBA) has announced that it expects to see $1.24 trillion in purchase mortgage originations in 2019–a 4.2 percent increase from 2018. MBA anticipates refinance originations will continue to trend lower next year, decreasing by 12.4 percent to $395 billion. Overall in 2019, total mortgage originations are forecasted to decrease to $1.63 trillion from $1.64 trillion this year. In 2020, MBA is forecasting purchase originations of $1.27 trillion, and refinance originations of $410 billion, for a total of $1.68 trillion. 
 
"The unemployment rate is at its lowest level in almost 50 years, resulting in faster wage growth and more confident homebuyers. While the Federal Reserve is expected to increase short-term rates further, 30-year mortgage rates should rise only modestly from here,” said Mike Fratantoni, MBA Chief Economist and Senior Vice President for Research and Industry Technology. “We are seeing some deceleration in the rate of home price growth, but believe this is a healthy pause for the market, as it will allow income growth to catch up to the recent run-up in home values.”
 
Fratantoni believes that housing demand should continue to grow over the forecast horizon, with the pace of home sales held back primarily by the constrained pace of new building. He expects that home purchase originations will increase each year from 2019-2021, and that pace should continue to increase beyond the forecast horizon, given the wave of millennial buyers beginning to hit the market.
 
"While the macroeconomic and housing market backdrops are, and should remain quite favorable, the mortgage industry continues to be challenged by the drop in origination volume, coupled with significant margin compression,” said Fratantoni. “Lenders of all types and sizes are seeing elevated costs, coupled with intensely competitive pricing, to capture more volume. This in turn is depressing revenues. We expect the Fed will raise rates in December, and then three times in 2019, bringing the fed funds target to about 3 percent. We forecast for the 10-year Treasury rate to increase to about 3.4 percent and then level out, bringing 30-year mortgage rates to roughly 5.1 percent.”
 
With the economy is running at full employment, Fratantoni expects that monthly job growth will average 120,000 in 2019, down from the monthly gains of 200,000 seen this year.
 
“The unemployment rate will decrease to 3.5 percent by the end of 2019, which should continue to keep housing demand at a healthy level, ultimately leading to an increase in purchase originations,” said Fratantoni.

 
Published
Oct 16, 2018
Planet Home Lending Reports Total Origination Volume Of $6.8B In Q2 2021

Planet Home Lending's total origination volume reached $6.8 billion in Q2 2021, up 77% from $3.9 billion in Q2 2020.

Industry News
Jul 22, 2021
FHFA Ends Controversial Refinance Fee

The FHFA announced that Fannie Mae and Freddie Mac will eliminate the Adverse Market Refinance Fee for loan deliveries, starting August 1, 2021.

Analysis and Data
Jul 19, 2021
Interfirst Mortgage Launches ONE, Backed By Non-Owner Occupied Properties

ONE is a unique product built on a single interest rate with no adjustments and qualifies off the cash flow of the rental property.

Industry News
Jul 16, 2021
Global Digital Lending Market Projected To Reach $27B By 2028

The Global Digital Lending Platform Market was valued at $7.14 billion in 2020 and is projected to reach $27.07 billion by 2028.

Analysis and Data
Jul 14, 2021
FOMC Discusses Raising Interest Rates

Inflationary pressures have finally forced the Federal Open Market Committee (FOMC) to discuss raising interest rates and tapering its bond-buying program.

Analysis and Data
Jul 14, 2021
Fathom Holdings Inc. Creates New Hispanic Division

Fathom Holdings Inc., a technology-driven real estate platform, announced the creation of their Hispanic Division to more adequately serve this fast-growing demographic. 

Industry News
Jul 07, 2021