WRE News October 18, 2023
Buyer
The Mortgage Bankers Association is forecasting an increase in total mortgage origination to $1.95 trillion in 2024 from the $1.64 trillion expected in 2023, along with a mild recession during the first part of next year.
The trade group also predicted purchase originations will increase 11% to $1.47 trillion next year while the total mortgage origination volume by loan count will increase by 19%, to 5.2 million loans in 2024 from 4.4 million loans expected in 2023. The forecast was released during the MBA’s 2023 Annual Convention & Expo in Philadelphia.
Mike Fratantoni, MBA’s chief economist and senior vice president for research and industry technology, warned that the mix of elevated interest rates, tighter credit conditions, and a depletion of pandemic-era household savings will result in a mild recession in the first half of 2024.
“Both fiscal and monetary policies have contributed to the much higher level of mortgage rates in 2023,” said Fratantoni. “The Fed’s hiking cycle is likely nearing an end, but while Fed officials have indicated that additional rate hikes might not be needed, rate cuts may not come as soon or proceed as rapidly as previously expected. Lower rates should help boost both homebuyer demand and increase the inventory of existing homes, thereby supporting purchase origination volume in 2024. The job market will likely slow as we enter 2024, with fewer jobs added and the unemployment rate increasing from its current rate of 3.8% to 5% by the end of 2024. Inflation will gradually decline towards the Fed’s 2 percent target by the middle of 2025.”
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