The Mortgage Brokers Association (MBA) shaved expectations for 2025 mortgage growth for the third month in a row in its latest forecast released Friday.
The MBA’s July 17 Mortgage Finance Forecast called for $1.02 trillion in total originations of first mortgages in 2025, up 14% from 2024, but the total was revised downward by 0.7%.
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Purchase and refinance originations were revised downward by similar amounts. The July 17 forecast called for purchase originations to rise 5% to $1.36 trillion this year, while refinances rise 35% to $664 billion.
The forecasts have been falling since the April 11 forecast, which expected total originations to rise nearly 17% to $2.08 trillion. Purchase originations were to rise 7% to $1.38 trillion and refinances 41% to $693 billion.
The MBA’s July 17 forecast cut its GDP estimate relatively heavily for the first half compared with its June 20 forecast, but its revisions to this year’s originations were confined to the second half.
It cut its forecast for total originations in the first half by 1.3% to $1.09 trillion. Second-half originations for purchases are now expected to rise 9% to $718 billion, while refinances are expected to rise 19% to $370 billion.
Gross National Product rose 2.4% in 2024, and the MBA forecast on Feb. 19 that it would grow 2.1% in 2025.
But its forecasts have taken a dimmer view of economic growth in 2025 since then. The July 17 forecast expects a much weaker first half, lowering its GDP forecast for the full year to 0.5%, down from 0.6% in its June 20 forecast.
The MBA cut its forecasts 1.3% for existing home sales and 4.5% for new home sales. It now expects existing home sales to rise 2% to 4.2 million and new home sales to fall 0.3% to 683,000.
The National Association of Home Builders (NAHB) said Thursday that single-family housing starts fell in June to the lowest rate since July 2024 under the weight of elevated interest rates, rising inventories and ongoing supply issues.
Overall housing starts increased 4.6% from May to June to a seasonally adjusted annual rate (SAAR) of 1.32 million units because of a strong gain in melt-family construction, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
However, single-family starts fell 4.6% from May to June to an SAAR of 883,000 homes and are down 10% from a year earlier.
“Single-family building conditions continued to weaken in June as housing affordability challenges caused builder traffic to move lower as buyers moved to the sidelines. Rising levels of resale inventory are also a headwind for the industry,” the NAHB said.
Single-family home building in the South was down 12.4% for the first half, far outpacing declines in the Northeast and the West. However, single-family home building is up 10% in the first half in the Midwest, where housing affordability conditions are generally better than much of the nation.
Contact Jim DuPlessis at [email protected].
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Jim DuPlessis
Jim covers economic data trends emerging for credit unions, as well as branch news and dividends.
