MBA Increases 2012 Origination Forecast By $200 Billion

11634_blurrydollar MBA Increases 2012 Origination Forecast By $200 Billion The Mortgage Bankers Association (MBA) has increased its mortgage origination forecast for 2012 by almost $200 billion, due entirely to an increase in refinances. MBA now expects that mortgage originations will reach $1.28 trillion in 2012, up from $1.26 trillion in 2011.

Refinance originations are now expected to total $870 billion in 2012, an almost identical amount to 2011. The MBA is slightly lowering its purchase originations forecast for 2012 from $415 billion to $409 billion.

This month's refinance estimate for 2012 reflects an upward revision of $188 billion from the MBA's April forecast, driven by an increase in the pace of refinance applications and originations, while purchase origination estimates were revised downward by $6 billion to reflect lower than previously expected home prices and weaker than previously expected home sales.

‘Scenarios we have consistently highlighted that could drive rates down and refis up have materialized, primarily due to market turmoil in Europe,’ says Mike Fratantoni, the MBA's vice president of research. ‘Deterioration of the debt situation in Spain and Greece and a new regime in France that is a weaker proponent of European austerity, along with slower economic growth globally, have driven the U.S. 10-Year Treasury yield down. Thus, we are projecting lower U.S. mortgage rates for the rest of the year and raising our refinance forecast as a result.’


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