A financial consulting firm forecasts rising interest rates willforce overall housing finance volumes down and make banks and credit unionscompete for a smaller pool of purchase money mortgages.
|Analysts with SNL Financialreported in a data dispatch late last week that rising rates havestrongly dampened demand for housing refinance loans but thatdemand for new housing finance loans has not yet grown enough toprovide business for every existing mortgage firm.
|Executives quoted in the report forecast a shakeout,particularly among mortgage firms which only came into the businessin the past few years.
|Executives also forecast that demand for purchase money loanswill continue to rise as long as the economy continues to expandand unemployment continues to drop. Purchase money demand ismuch more correlated to economic growth than with interest rates,the firm quoted mortgage executives as saying.
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