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US Mortgage Originations to Reach $1.95 trillion in 2024

The US Mortgage Bankers Association (MBA) expects that total mortgage origination volume will increase to $1.95 trillion in 2024, up from the $1.64 trillion forecast in 2023.

US Mortgage Originations to Reach $1.95 trillion in 2024

The Mortgage Bankers Association (MBA) presented its 2024 outlook at the 2023 Annual Convention & Expo. According to the MBA, total mortgage origination volume is expected to increase to $1.95 trillion in 2024, while purchase originations are forecast to increase 11% to $1.47 trillion next year.

As for the loan count, total mortgage origination volume will also predictably increase by 19%, to 5.2 million loans in 2024, up from 4.4 million loans expected in 2023.

The main reason for the expected growth is a mild recession forecast by MBA in the first half of 2024. The organization believes that it will be driven by “the combination of higher interest rates, tighter credit conditions, and a depletion of pandemic-era household savings.” This economic situation is expected to drive mortgage rates down, enabling more homebuyer loans.

According to Mike Fratantoni, Chief Economist and Senior Vice President for Research and Industry Technology at MBA, federal rate cuts may not come as soon or proceed as rapidly as previously expected. Lower mortgage rates, in turn, would help boost homebuyer demand and the inventory of existing homes, “thereby supporting purchase origination volume in 2024.”

However, the spread between mortgage and Treasury rates still remains roughly 120 basis points wider than typical. MBA’s baseline forecast is for mortgage rates to end 2024 at 6.1% and fall to 5.5% only at the end of 2025.

In addition, MBA expects that new home sales will continue to be stronger than existing home sales, given the scarcity of existing home listings and competitive bidding process.

In 2024, delinquency rates are also forecast to increase along with unemployment rise. MBA believes that borrowers will be stressed by increasing property taxes and rising insurance costs. Besides, the resumption of student debt payments will make it harder to get a mortgage while being a student.

Nina Bobro

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