The Mortgage Bankers Association (MBA) cites increasing interest rates and declining mortgage applications as contributing to a lowered mortgage originations forecast in 2014.
Originations for both purchase mortgages and refinances are projected to total $1.12 trillion this year, down $57 billion from the MBA’s previous forecast.
“Despite an economic outlook of steady growth and a recovering job market, mortgage applications have been decreasing – likely due to a combination of rising rates and regulatory implementation, specifically the new Qualified Mortgage Rule,” said Mike Fratantoni, Chief Economist for MBA, in a statement. “As a result, we have lowered our expectations for both purchase and refinance originations in the first half of 2014.”
MBA now expects purchase originations to be $677 billion in 2014 rather than the previous $711 billion forecast. That still represents a 3.8% increase from 2013, Fratantoni notes.
Refinance originations were revised down from $463 billion for the year to $440 billion. This updated amount is around 60% lower than 2013 refinance originations.
Written by Alyssa Gerace