The Mortgage Bankers Association said it thinks prospects for mortgage originations from July 2026 through March 2027 are dimmer than they were a month ago.
Its forecast released this week and dated May 15 showed a clear story over that particular nine-month period, while only making minor pads and tucks for this year's second quarter and the nine months from April through December 2027.
The MBA reinforced the pessimism by its release Wednesday of its Weekly Mortgage Applications Survey, which showed the seasonally adjusted index for purchase mortgages for the week ending May 15 was down 4% from a week earlier.
MBA Deputy Chief Economist Joel Kan said overall applications fell to their lowest level in five weeks as purchase borrowers pulled back across conventional and government loan types.
"Ongoing concerns around inflation from higher fuel costs combined with rising concerns over global public debt pushed Treasury yields higher in the U.S. and abroad last week," Kan said. "This resulted in higher mortgage rates across the board, with the 30-year fixed rate increasing to 6.56%, its highest level in seven weeks."
However, the rates rose late in the week, which Kan said was one reason why the number of refinance applications was down only 0.1% from a week earlier.
Overall, he said, "almost 10% of applications were for ARM loans, the highest share since October 2025, as borrowers sought loan types with lower rates, given that the ARM rate was 80 basis points below the 30-year fixed rate."
MBA forecast $1.56 trillion in total originations over the nine months ending March 2027, a downward revision of 1.9% from the April 20 forecast that resulted in originations that are 8% lower than they were for the nine months ending March 2026.
Most of the change was concentrated in refinances, where forecasts were lowered 3.7%. The MBA said it now expects refis to fall 23% to $500 billion for the nine months ending March 2027.
For purchases, the MBA lowered its forecast by 1.1%. It said it now expects purchases to rise 1.4% to $1.06 trillion for the nine months ending March 2027.
This year's second quarter actually came in slightly better than the MBA expected for purchases, so the MBA raised that forecast by 0.3%. It made no change for refis.
The result was that total second-quarter originations are expected to rise 10% with purchases rising 1.9% to $360 billion and refinances rising 40% to $207 billion.
Revisions for the nine months ending December 2027 were slightly positive.
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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