The latest forecast from the Mortgage Bankers Association suggests that mortgage refinancings will end 2009 strong but decline to below 2008 levels in 2010.
By contrast, mortgages for new home purchases will end the year about 2% below 2008 levels but reach about 12% up in 2010.
Purchase origination for 2009 will be $718 billion, about 2% below the 2008 level of $731 billion. Purchase origination should rise about 12% in 2010 as existing home sales recover and home prices stabilize the MBA forecast.
Refinance origination will end 2009 at $1.245 trillion, up about 60% from $777 billion in 2008. Refinance activity will likely decrease in 2010 to about $745 billion as mortgage rates increase, the association added.
The MBA forecast mortgage rates would end 2009 at 5% and climb gradually to end 2010 at 5.6%.
