WASHINGTON – With the purchase mortgage market continuing to overshadow the outgoing refinance market, the Mortgage Bankers Association says looking ahead to 2005 and 2006 purchase mortgage originations should remain near the record levels of 2004. Speaking at the MBA's recently held 91st Annual Convention and Expo in San Francisco, SVP and Chief Economist Doug Duncan said the MBA forecasts purchase originations to decline from an expected $1.48 trillion in 2004 to $1.45 trillion in 2005 and $1.44 trillion in 2006. The refi market is expected to decline from $1.19 trillion in 2004 to $.68 trillion in 2005 and $.46 trillion in 2006. As a result, refinance mortgages will account for only 32% of the mortgage market in 2005, and 26% in 2006. Duncan said the MBA expects 30-year fixed mortgage rates to increase gradually to 6.5% by the end of 2005 and 6.8% by the end of 2006. This will largely be the result, says the MBA official, of long-term Treasury rates staying well below 5% during 2005 and rising to 5.1% by the end of 2006. Short-term, one-year Treasury rates are expected to increase more quickly, from 2.2% to 3.2% by the end of 2005, and 4.0% by the end of 2006.