MBA Adjusts 2011 Origination Volume Prediction
January 27, 2011
The Mortgage Bankers Association predicts loan origination volume for single-family loans will fall to $966 billion in 2011.
This is 35 percent lower than 2010. The last time total mortgage originations were as low was 1997, when they totaled $833 billion. The weakness is expected to continue next year, when they are seen at $976 billion.
Purchase originations are projected to rise to $614 billion from $473 billion last year, but refinancings are expected to slide 66 percent to $352 billion. Refinance share of the total market is seen shrinking to 36 percent this year from 69 percent last year.
Several factors resulted in the MBA readjusting its forecast. The association predicts that overall home sales will inch down 0.1 percent during the year. Sales of existing homes will fall 1 percent to 4.82 million, and new home sale will rise 10 percent to 358,000. The MBA attributes the sales decline mostly to slow economic recovery and high unemployment. Until hiring picks up, the market will continue to struggle.
Jay Brinkmann, MBA’s chief economist, also said the forecast was reduced due to recent credit liability issues affecting banks.