MBA Forecasts 2012 Origination Decrease

The Mortgage Bankers Association (MBA) has forecasted that mortgage originations will decrease from an estimated $1.2 trillion in 2011 to $900 billion in 2012. The drop will result from a substantial decline in refinance originations, while purchase originations will increase only slightly. The MBA report predicts “another year of anemic growth in 2012,” with somewhat faster growth in 2013. “Purchase volume will stay low as home sales in 2012 remain little changed from 2011, and as home prices begin to grow by the end of 2012,” said Jay Brinkmann, MBA’s Chief Economist and senior vice president for Research and Education.” “The gradual increase in mortgage rates will slow refinance volume, but the first half of 2012 will benefit from a spillover of applicants from the end of 2011, and potential changes to the HARP program may also increase refinance volume. A recession would lead to a drop in 2012 origination volume. A faster economic recovery led by the housing market would mean faster home price growth and more sales volume, increasing purchase originations somewhat, but would cut off refinance volume sooner than in our forecast.”

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