Industry News

Bankers project major declines in home sales, lending

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Mortgage loan fundings will fall 16 percent in 2008, dropping below the $2 trillion mark for the first time since 2000, according to the latest forecast by the Mortgage Bankers Association. Sales of new and existing homes will see declines of a similar magnitude, the group said. The MBA forecasts that existing-home sales will fall 13 percent in 2008, to 4.94 million, and that sales of new homes will decline 15 percent, to 666,000 units. The MBA expects total mortgage originations will fall to $1.96 trillion in 2008, down from a projected total of $2.34 trillion in 2007. Purchase-mortgage originations are expected to drop even more sharply this year, to $955 billion, an 18 percent pullback from 2007. Although the bankers' group forecasts an additional 4 percent decline in total mortgage originations in 2009, to $1.88 trillion, sales of new and existing homes should rebound, the group said. The MBA projects sales of existing homes will grow by 4 percent in 2009, and sees a 7 percent up...