MBA Sees Originations Increasing 7% in 2015

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MBA Sees Originations Increasing Seven Percent in 2015

Washington, DC (October 21, 2014) – The Mortgage Bankers Association announced today that it expects to see $1.19 trillion in mortgage originations during 2015, a seven percent increase from 2014.  While MBA anticipates purchase originations will increase 15 percent, it expects refinance originations to decrease three percent.   MBA’s forecast predicts purchase originations will increase to $731 billion in 2015, up from $635 billion in 2014.  In contrast, refinances are expected to drop to $457 billion, from $471 billion, in 2014.    For 2016, MBA is forecasting purchase originations of $791 billion and refinance originations of $379 billion for a total of $1.17 trillion. “We are projecting that home purchase originations will increase in 2015 as the US economy continues on its current path of stronger growth, job gains and declining unemployment.  The job market has shown sustained improvement this year; with robust monthly increases in both payroll jobs and job openings,” said Michael Fratantoni, MBA’s Chief Economist and Senior Vice President for Research and Industry Technology.  “We are forecasting that strong job growth, coupled with still low mortgage rates, should translate to an increase in home sales and purchase originations. “Our projection for overall economic growth is 2.9 percent in 2015 and 2.4 in 2016, which will be driven mainly by strong consumer spending and business fixed investment, as households continue to spend on durable goods, such as cars and appliances, and as businesses invest in new plant and equipment.  Moreover, after several years of contraction, the rate of government spending should no longer be a drag on the economy. “We expect that the 10-Year Treasury rate will stay below three percent through the first half of next year as concerns about broader global issues have caused a flight to quality, with investors seeking safety in US Treasury securities.  However, if the global turmoil diminishes and US economic growth continues, we anticipate the rate will exceed three percent in the second half of 2015, continuing to increase through 2016.  We expect the Federal Reserve will keep short-term rates near zero until mid 2015, when we expect to see the first fed funds rate increase. “We forecast that monthly job growth will average 220,000 per month in 2015, and that the unemployment rate will decrease to 5.4 percent by the end of 2015 and 5.2 percent in 2016.  While part of the decrease in the unemployment rate in 2014 has been driven by lower labor force participation, we have seen payroll growth outpace population growth and a declining number of unemployed workers.  Our anticipation is that as the economy grows, more workers may return to the work force to seek employment, and this will temper the decline of the unemployment rate. “With the recent drop in mortgage rates, some borrowers now have an incentive to refinance and with the home price gains of the last two years more homeowners have enough equity to refinance, so we expect a pickup in refinance application activity over the next few months, which will lead to higher refinance originations in early 2015,” Fratantoni said. MBA upwardly revised its estimate of originations for 2014 to $1.11 trillion from $1.01 trillion, and for 2013 to $1.85 trillion from $1.76 trillion, to reflect the most recent data reported in the 2013 Home Mortgage Disclosure Act (HMDA) data release.


The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, REITs, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: