Industry News

Real estate forecast still rosy

Trade group predicts $2.5 trillion in mortgages this year

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The Mortgage Bankers Association is predicting $2.5 trillion in mortgage originations in 2004, according to its quarterly update of its Mortgage Finance Forecast. "June's employment data, showing slower jobs growth, does not mean the economy is faltering," said MBA chief economist Doug Duncan. "Consumer spending remains strong and business expenditures are strengthening, supported by rising corporate profits. The slowing pace of growth to a sustainable level is to be expected after the very strong growth during the second half of 2003." The group had previously estimated $2.4 trillion in originations, with refinances making up $1 trillion of that and home purchase loans making up the rest, or $1.4 trillion. The group is still predicting $1.4 trillion in mortgages for home purchases, but has revised its forecast of refinancings to $1.1 trillion. MBA also expects interest rates to rise this year, with the 30-year fixed mortgage rate reaching 6.5 percent in the fourth quarter. MBA ...