By KIMBERLEY HAAS
The Mortgage Bankers Association’s chief economist and his team had some good news for those in attendance of their annual convention and expo on Sunday afternoon.
Total mortgage origination volume is expected to be $1.95 trillion in 2024, up from the $1.64 trillion projected for 2023.
At the same time, volume is predicted to increase 19% by loan count, with 5.2 million loans expected next year.
Michael Fratantoni, chief economist and senior vice president of research and industry technology, said members just have to make it through the winter.
“In terms of origination volume, we think 2023 is the low point,” Fratantoni said, adding that many lenders have had five or six quarters of production losses.
In other good news, Fratantoni said they expect that the Federal Reserve will maintain the federal funds rate target range and do not expect an increase from them again this year. He projects there will be at least two cuts in 2024, and possibly more in 2025.
“We do think the Fed is at the top of their cycle. The next move is a cut, likely in the spring,” Fratantoni told the audience.
Actions by officials at the Federal Reserve do not dictate mortgage rates, but do influence them. MBA’s current forecast is that mortgage rates will be 6.1% at the end of 2024 and could reach 5.5% at the end of 2025.
That doesn’t mean house values will drop. As a matter of fact, MBA leaders expect home prices will grow nationally over the next three years.
Joel Kan, vice president and deputy chief economist for the MBA, said there is still a lot of demand and inventory is low.
“We’re hearing that the number of days for a house on the market is actually still pretty short. There’s still multiple offers, pretty competitive offers, so that shortage of inventory really is putting a floor under home price growth and it’s actually helping a lot of sellers,” Kan said.
Kan said new home sales continue to be strong as buyers find them an enticing alternative to existing homes, especially since the existing home market is not only competitive, the structures are aging.
The convention and expo is being held in Philadelphia at the Pennsylvania Convention Center. It will wrap up on Wednesday.
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