The Mortgage Bankers Association on Tuesday released revised estimates for the third and fourth quarter of 2020 and predicted record purchase volume for 2021. Although the MBA expects decreased refinancings in 2021 and a decline in overall origination to around $2.56 trillion, that would still be the second-highest origination total in the last 15 years.
The rebounding economy is likely to mean higher mortgage rates, with the MBA forecasting 2.9% by the end of 2020, rising to 3.3% by Q4 2021.
The MBA is forecasting a rise in purchase originations to $1.59 trillion, which would break the previous record of $1.51 trillion set in 2005. However, the MBA sees refinances decreasing to $971 billion.
“The housing market has seen a meaningful rebound since the onset of the pandemic,” said Mike Fratantoni, MBA chief economist. “Record-low mortgage rates have led to a surge in borrower demand for refinances and home purchases.”
For 2020, the MBA is estimating $3.39 trillion in mortgage originations – the highest since 2003 and a 50% increase from 2019.
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