The Mortgage Bankers Association (MBA) shared their projections for the economy and housing market for the next 2 years in a press release this week. Optimistic that the overall economy would see 2.3% growth between 2016 and 2017, MBA’s Chief Economist and Senior Vice President for Research and Industry Technology, Mike Frantantoni, stated that the housing sector will have a bigger impact on the economy than in recent years. Single-family housing starts are forecasted to grow by 17% in 2016 and 15% in 2017.
Additionally, in anticipation of robust household formation, stronger employment rates and wages, and “a more liquid housing market,” the MBA foresees purchase mortgage originations increasing by 10%, or $905 billion, in 2016 and $978 billion in 2017. Refinance mortgage originations, on the other hand, are expected to taper off by one-third to $415 billion in 2016 and $331 billion in 2017.
Frantantoni stated, “Refinance activity will continue to decline as there are few remaining households that can benefit from an interest rate reduction and because rates will gradually begin to rise from historic lows in coming years. Home equity products may see an increase in demand as home prices continue to increase at a decelerating rate.” To read the full press release, visit http://bit.ly/1MC5Nkq.