Industry News

From $2 trillion to $2.5 trillion

Low interest rates to add $500 billion to mortgage originations

The Mortgage Bankers Association today increased its forecast for this year's total mortgage originations by a whopping $500 billion, and the group's economists now believe 2004 will post yet another record in home purchase originations. MBA Chief Economist Doug Duncan now expects total loan originations to hit $2.5 trillion this year, up from his previous forecast of $2 trillion, due to low interest rates. His forecast expects $1.4 trillion in purchase-money originations this year, an increase compared with $1.3 trillion last year. Long-term interest rates on home loans this month hit their lowest point since last summer. The 30-year fixed-rate average fell to 5.07 percent on Friday, and the 15-year fixed-rate rose slightly to 4.39 percent. The 1-year adjustable sank to just 2.93 percent. Mortgage refinancings have rebounded due to the decline in interest rates. Refi activity eased up in the fourth quarter of 2003 after mortgage rates increased steadily from a low point of 4.9 p...