Forecast: Mortgage Origination to Reach $2.3 Trillion in 2025

Total mortgage origination volume is expected to increase to $2.3 trillion in 2025 from the $1.79 trillion expected in 2024, according to a forecast from the Mortgage Bankers Association (MBA).

In the new forecast, purchase originations will increase 13% to $1.46 trillion next year. By loan count, total mortgage origination volume is expected to increase by 28% to 6.5 million loans in 2025 from the 5.1 million loans expected in 2024.

MBA predicts mortgage rates will reach 5.9% by the end of 2025 and remain close to that level for the forecast horizon. The forecast was released during the MBA’s 2024 Annual Convention & Expo.

“Monetary policy has turned the corner with the first rate cut in September 2024. The expectation of further rate cuts has already been baked into mortgage rates, and we expect mortgage rates are likely to remain within a narrow range around 6% for the foreseeable future,” said Mike Fratantoni, MBA’s chief economist and senior vice president for research and business development. “We are bullish about the spring 2025 housing market. Mortgage rates at this level should support homebuyer demand and gradually reduce the lock-in effect, thereby increasing the inventory of existing homes and supporting higher purchase origination volume in 2025.”

Joel Kan, MBA’s vice president and deputy chief economist, added that the current market’s trends can positively impact next year’s performance.

“It is also encouraging that an increasing share of first-time homebuyers have turned to newly built homes as an option, given the lack of previously owned starter homes on the market,” Kan said. “These factors should support a bigger gain in purchase activity early next year, especially if mortgage rates remain near these levels or decline further.”