Mortgage volume is down substantially—hitting a new, five-year low in the fourth quarter of 2013.
While the reverse mortgage market is anticipating a downturn due to regulatory factors and product changes, the forward market, too, is seeing a downward decline in terms of originations, according to data compiled and published this week by Inside Mortgage Finance.
A a shift away from the boom of refinancing that took place as a result of historically low interest rates is leading to fewer originations. The impact of new Qualified Mortgage rules now being enforced by the Consumer Financial Protection Bureau are yet to be seen.
Originations “soared” in 2009, the WSJ writes in its coverage of the data, and peaked in mid-2012 before falling sharply in 2013. Volume fell 19% in the third quarter of 2013, followed by an additional 34% decline in the fourth quarter.
The Mortgage Bankers Association has made note of the downturn and lowered its 2014 outlook in January by $57 billion to $1.2 trillion over the course of the year, despite projecting a slight uptick in year-over-year volume for 2014.
“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,” Mike Fratantoni, Chief Economist for MBA, said at the time. “As a result, we have lowered our expectations for both purchase and refinance originations in the first half of 2014.”
Written by Elizabeth Ecker