The Mortgage Bankers Association lowered its estimate based on declining mortgage applications and rising interest rates.
“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, MBA’s chief economist. “As a result, we have lowered our expectations for both purchase and refinance originations in the first half of 2014. Purchase originations are now expected to be $677 billion for 2014, compared to $711 billion forecast previously. Compared to 2013, purchase originations are expected to increase by 3.8 percent.”
The MBA’s projection for refinance originations has also been revised downward. Previously, the MBA had estimated total refinance originations for 2014 at around $463bn. That number has been revised to $440bn.
While purchase originations are expected to rise slightly from 2013 totals, the revised refinance number represents a drop of about 60% from last year.
The forecast for total mortgage originations in 2014 has been lowered by $57bn to $1.12 trillion for the year, according to data released Tuesday.