MBA Economists Get Candid On 2026 Projections
MBA economists forecast that macro-economic headwinds, such as higher unemployment and rising inflation, will impact the pace of originations in 2026
The Mortgage Bankers Association’s (MBA) projections for loan volumes for next year are lower than previously forecast, the group’s economists said in a candid conversation with reporters 48 hours after making their formal presentations to the MBA convention in Las Vegas.
Previously, the MBA was expecting a near 10% jump in originations. But due to macroeconomic headwinds such as higher unemployment and rising inflation, originations are now expected to increase just 8% in 2026, MBA Deputy Chief Economist Joel Kan said.
He also pointed out that rising inventories of houses for sale “are starting to weigh on prices,” which will lead to lower individual loan amounts next year. And, he added, applications are “not coming in as strong as expected.”
The MBA is predicting that mortgage rates will remain roughly in the same 6%–6.5% range over the next couple of years, as they are currently. But both MBA Chief Economist Mike Frantantoni and Deputy Economist Kan agreed that there may be “little dips” in rates here and there.
That could lead to a spate of originations, especially in the refi sector, where “borrowers are very sensitive to interest rate movements,” Kan said.
Nevertheless, with the economy going in the wrong direction, Frantantonti said 2027 and 2028 “will look a lot like 2026" as the market plateaus.
If the forecast is wrong, one way or the other, then there will either be a big jump in refis and volumes will reach $2.8 trillion next year, or volumes will dip to $1.9 trillion, Frantantoni said. “The downside is not as severe as the upside.”
He also said one reason for the projected increase in volume in 2026 is that people “are finally acclimating” to mortgage rates in the 6% range, as many are “no longer waiting for rates to drop.”
The lock-in effect that keeps owners with extremely low rates from selling and moving on is still impacting the market, he said. But “first-time buyers are setting their budgets for 6.5%. They’re not waiting.”
Meanwhile, MBA’s Vice President of Industry Analysis Marina Walsh, CMB said that while the 25-basis point profit independent mortgage bankers racked up in the second quarter doesn’t seem like much, it’s still a 70-basis point jump from the previous quarter.
Still, Walsh confided that lots of lenders “are still struggling,” and as a result, mergers and acquisitions are likely to continue.
She also reported that the pull-through rate for builder-affiliated mortgage companies is roughly 75%.
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