iEmergent Revises 2024 Origination Forecast Downward – NMP Skip to main content

iEmergent Revises 2024 Origination Forecast Downward

Sep 26, 2024
iEmergent Forecast
Associate Editor

The firm lowered its expectations due to lackluster purchase volume

Lower-than-expected purchase originations has put a damper on end-of-year origination forecasts. Forecasting and advisory services firm for financial, mortgage, and real estate industries, iEmergent, announced a downward revision of its 2024-2026 US Mortgage Origination Forecast due to a lackluster purchase market. Meanwhile, the firm projects refinance volumes to rise in tandem with declining interest rates

Due to stubbornly high interest rates, weaker-than-expected purchase market, and ongoing affordability issues, iEmergent’s quarterly forecast update included a revision to its 2024 mortgage origination forecast. 

Total origination volume for 2024 is forecasted to increase only 5% from last year. iEmergent Chief Economist Mark Watson explained that 2024 purchase originations will fall in loan count compared to 2023; however, an increase in average loan sizes is projected to modestly increase purchase dollar volume by 3.5%.

Refinance originations, on the other hand, are projected to rise 48% from their 2023 lows as interest rates soften. 

Looking further ahead, in 2025, iEmergent forecasts purchase volume to grow by 7% while refinances grow by 37% as the market enters a lower interest rate environment. By 2026, the firm believes that overall mortgage origination volume is expected to show modest improvements as housing affordability eases. 

"The economic boon of the COVID-era refinance boom has been underappreciated in its impact on keeping interest rates higher for longer than anticipated," said Watson. "While this has helped maintain economic strength, it has also suppressed mortgage origination volumes. We expect rates to finally start declining in the months ahead, offering some relief for both potential buyers and those looking to refinance."

The quarterly update noted that Fed Chairman Jerome Powell's "recalibration" effort has “come a little too late to have much impact on 2024 mortgage originations," but it "better positions the economy to have its hoped-for soft landing in 2025 and a larger originations market.”

About the author
Associate Editor
Katie Jensen is a mortgage news reporter at NMP.
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