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The
Washington-based industry group forecast $1.1 trillion in
purchase mortgage originations, an 11 percent increase from
2016.
"Strong household formation coupled with further job growth,
rising wages, and continuing home price appreciation will drive
strong growth in purchase originations in the coming years,"
Michael Fratantoni, MBA's chief economist, said in a statement.
On the other hand, the MBA forecast a steep 40 percent drop in
mortgage refinancing next year to $529 billion as the Federal
Reserve raises interest rates gradually through 2018.
"We expect that refinance volume will most likely be much lower
over the next few years as homeowners have repeatedly had the
opportunity to lower their rates, and there will be fewer
households with an incentive to refinance if rates follow the
path we are projecting," Fratantoni said.
Fratantoni said the 10-Year Treasury yield will stay below 3
percent through the end of 2018, which will keep interest rates
for 30-year mortgages below 5 percent over the same period
<US10YT=RR>.
Total home loans in 2017 will total $1.63 trillion, down from
$1.89 trillion in 2016, MBA said.
In 2018, total mortgages issued will slip to $1.59 trillion,
with $1.18 trillion in purchase originations and $410 billion in
refinancing originations.
(Reporting by Richard Leong; Editing by Steve Orlofsky)
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