US Housing Mortgage Originations Predicted to Drop by More than 20% in 2010
US housing mortgage originations are predicted to drop by more than 20% in 2010, according to the December 2009 forecast issued by the Mortgage Bankers Association (MBA).
In particular the MBA forecast predicts that in 2010 total originations of mortgages for both purchase and refinancing of houses in structures with 1-4 family units, will decrease by 24% compared to 2009.
Note that MBA predicts that total 2009 mortgage originations will reach roughly 2 trillion, 30% higher than the activity registered in 2008, mostly due to a 60% increase in mortgage originations for refinancing as a result of the decrease in interest rates.
Within this context, the MBA forecast predicts that the decrease in housing mortgage originations in 2010 will be exclusively due to a 44% reduction in refinancing activity due to rising interest rates.
On the contrary house purchase mortgage originations are predicted to increase by 12% in 2010 and continue rising in 2011 at a rate in excess of 10% as consumer and investor confidence improves.
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