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MORTGAGE BANKERS ASSOCIATION REVISES FORECAST TO REFLECT DIP IN REFINANCINGS
| The Mortgage Bankers Association of America (MBA) recently released its revised estimates of mortgage production for 2003 and 2004. MBA is now forecasting $3.2 trillion in mortgage originations for 2003 and $1.5 trillion in 2004. This is down from the previous forecast of $3.4 trillion for 2003 and $1.9 trillion for 2004 due to a more rapid drop-off in mortgage refinancings. Mortgages obtained to refinance homes will total $2.1 trillion in 2003, 8 percent less than previously estimated, according to the report. In 2004, refinancings will add up to only $430 billion versus the previous estimate of $833 billion. MBA's estimate of mortgages made for the purpose of purchasing a home remains at $1.08 trillion in 2003 and $1.11 trillion in 2004. "We have been forecasting mortgage interest rates to slowly increase, eventually drying up the refinance market, but the recent upsurge in rates has moved that event forward," said Douglas Duncan, MBA's chief economist and senior vice president of Research and Business Development. "Rates have risen dramatically for several reasons, the most important being the expectations of rapid growth beginning in the third quarter and changes in investment strategies." |