iEmergent, a Des Moines, Iowa-based market research, forecasting and advisory services firm, has issued a first-quarter update to its formal 2009-2013 Mortgage Volume Forecast that factors in the impact of the economic stimulus bill. This update provides lending details regarding expected loan volumes and market behavior at the national, state, county and local community levels.
The first-quarter forecast anticipates a slight increase in total purchase volume compared to iEmergent's previous 2009 forecast. It also represents a positive change of nearly 55% in projected refinance volume for the year. Highlights of the updated national forecast for 2009 home financing opportunities for lenders include a total purchase volume of 4.415 million loans for $735 billion, a refinance volume of 5.125 million loans for $916 billion and total mortgage volume of 9.540 million loans for $1.651 trillion.
The slight increase in purchase volume reflected in the updated 2009 forecast is based on the expectation that the $800 billion stimulus spending and the recently announced Homeowner Affordability & Stability Plan, which contains home-buyer tax credits, major initiatives focused on job creation and aggressive steps toward foreclosure prevention, should produce a positive impact on the housing market during 2009.
The projected 55% growth in refinance volume from iEmergent's forecasts from five months ago is explained by the expectation that Financial Stability Plan solutions will maintain downward pressure on mortgage rates, unfreeze credit and slow the rate of home-price declines as the year progresses, thereby creating a stronger refinance market.
However, the projected increase in refinances could likely be offset by unemployment, uncertainty and consumer cynicism about the broader U.S. economy, and the eventual halt of interest-rate decline as the federal deficit forces mortgage rates higher by the end of the year, the company says.