Both categories are still expected to rise this year: Purchases are forecast to be 7.4% higher and refinances 41% higher than 2024.

Outside of originations, the MBA’s forecast dimmed for many key economic measures.

The MBA's Feb. 19 forecast expected the nation's gross domestic product would rise at a 2.4% annual pace in this year's first quarter, just slightly below last year’s 2.4% rate, and taper down to a 1.7% annual growth rate in the first quarter of 2026.

But after cuts in the past two forecasts, the MBA said it now expects first-quarter growth will be a mere 0.2% and GDP will actually fall at a 0.1% annual rate in the third quarter. Growth returns to 0.7% in the fourth quarter and rises to a 1% rate by 2026's first quarter.

From its March 20 forecast to its April 11 one, the MBA also lowered 2025 forecasts for:

• Single-family housing starts, which it lowered 4.9% to 1 million homes. The revised number is 0.1% higher than 2024.
• Total existing home sales, which it lowered 1.9% to 4.3 million. The revised number is 4.5% higher than 2024.
• New home sales, which it lowered 4.2% to 714,000. The revised number is 3.9% higher than 2024.
• The rate for 30-year fixed-rate mortgages, which it raised from March 20’s forecast of 6.5% to 6.7%. The revised amount compares with 6.6% a year earlier.

Separately, the MBA’s Weekly Mortgage Applications Survey released Wednesday showed refinance applications for the week ending April 11 were 12% lower than the prior week, but still 68% higher than a year earlier. Purchase applications fell 5 % from the prior week, after seasonal adjustments, and was 4% lower than a year ago.

Rates for 30-year fixed-rate mortgages were 6.81% April 11, up from 6.61% a week earlier.

“Mortgage rates moved 20 basis points higher last week, abruptly slowing the pace of mortgage application activity,” MBA Chief Economist Mike Fratantoni said.

“Purchase volume remains almost 13% above last year’s level, but economic uncertainty and the volatility in rates is likely to make at least some prospective buyers more hesitant to move forward with a purchase,” Fratantoni said.

Last week also showed a “notable” increase in adjustable rate mortgages, he said. The MBA’s reports showed the volume of ARMs has doubled in the last two months.

“Given the jump in rates, more borrowers are opting for the lower initial rates that come with an ARM, with initial fixed rates closer to 6% in our survey last week,” Fratantoni said. “The ARM share at 9.6% was the highest since November 2023, and this reflects the share of units. On a dollar basis, almost a quarter of the application volume last week was for ARMs, as borrowers with larger loans are even more likely to opt for an ARM.”

Contact Jim DuPlessis at [email protected].