Suburban-Homes
The Mortgage Bankers Association continued to sour on prospects for the first quarter, packing up its former winter optimism and moving it forward to the spring and summer in its latest monthly forecast.
The net result for the MBA's Feb. 19 forecast was little change in the outlook for total originations for the entire year, which the MBA expects will rise 15% this year to $2.05 trillion. That balancing act was achieved as the MBA raised its projections for purchases while dialing back projections for refinances from its Jan. 19 forecast.
For the first quarter, the MBA lowered its projections for refinances by 12%, while nudging its purchase forecast up by 0.4%.
For refinances, the MBA further lowered its forecasts by 1.3% in the second quarter and 1.6% in the third quarter.
For purchases, it then raised forecasts by 4.1% for the second quarter and 1.8% for the third quarter.
The MBA’s Feb. 19 economic forecast continued its pattern of showing improvement in the growth rate for the Gross Domestic Product since last fall’s election. GDP growth for 2025 has climbed from a recent low of 1.2% in the MBA’s Oct. 27, 2024 forecast to 1.8% in its Nov. 21 forecast and 1.9% by its Dec. 20 forecast. The Feb. 19 forecast now predicts 2.1% growth for the year, approaching 2024’s 2.3% growth rate.
The National Association of Realtors plans to release January data on existing home sales on Friday.
The MBA’s Weekly Mortgage Applications Survey for the week ending Feb. 14 showed mortgage applications decreased 6.6% from one week earlier.
Refinances were up 39% from a year earlier, but fell 7% from a week earlier.
Purchases fell 1% from a year earlier, and, after seasonal adjustments, fell 6% from a week earlier.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less fell to 6.93% for the week ending Feb. 14, down slightly from 6.95% a week earlier, with points increasing to 0.66 from 0.64 (including the origination fee) for 80% loan-to-value ratio loans.
“Mortgage rates decreased on average over the week, as markets brushed off unexpectedly strong inflation data,” MBA Deputy Chief Economist Joel Kan said.
“Despite mortgage rates declining, with the 30-year fixed mortgage rate dropping to 6.93%, mortgage applications decreased to their slowest pace since the beginning of the year,” Kan said. “Purchase applications were down for the week, as buyers remained on the fence, although loosening inventory may help support activity in the coming months. Refinance applications had been rising in previous weeks but dipped as rates remained close to 7%.”
Contact Jim DuPlessis at [email protected].
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