The latest forecast by the Mortgage Bankers’ Association shows that the decline in the number of loans will continue to be softer than expected, but the trend will clearly decline in 2022.
MBA forecast for August 18 revised the total volume of exports for the third quarter upward by 4.5% to $ 862 billion. But the revised amount is still down 20% from a year earlier and 18% from the second quarter.
MBA data show that originals peaked at $ 1.26 trillion in the fourth quarter of 2020, and has declined every quarter since then. His forecast indicates that this trend will continue until the first quarter of 2022, when the number of originals is expected to hit a minimum of $ 516 billion. It peaks next year at $ 623 billion in the second quarter and a drop to $ 602 billion in the fourth quarter, which is the end of the current horizon for the quarterly forecast.
Refinancing continues to be a major factor in revisions. The MBA pushed them again, this time by nearly 11% for the third quarter. The expected volume of $ 445 billion is 32% less than a year ago and 25% less than in the second quarter.
MBA Forecast for July 21 expected refinancing to fall below 50% of the original’s value in the third quarter. Instead, according to MBA estimates, they are about 52% – up from 56% in the second quarter and 61% a year ago.
The MBA has made minor adjustments to its purchasing forecasts this year, and in a report dated August 18, they are down 1.4% to $ 417 billion for the third quarter. Revenue is only slightly lower than a year ago and 9% lower than in the second quarter.
Over the year, the MBA changes increased total submissions by 1% to $ 3.61 trillion, still 5.7% lower than in 2020. Refinancing shipments are expected to fall 17% to $ 1.98 trillion in 2021, while purchases are expected to rise 14% to $ 1.63 trillion.
Joel Kahn, AVP’s MBA Economic and Industry Forecast, said on Wednesday that refinancing was down from last year, although interest rates in the week ending Aug 13 were 7 basis points lower than a year earlier.
“The number of eligible homeowners who can benefit from refinancing is now smaller,” Kahn said.
FHA loans, which are usually popular with first-time buyers, are expected to fall 21% this year to $ 276 billion.
Kahn said average loan sizes remain close to record levels.
“This is a constant sign that selling prices are still high due to fierce competition leading to accelerated growth in house prices,” Kahn said.
ATTOM, curator of the Irvine, California-based real estate database, released a report Thursday showing the median down payment, borrowing amount, and down payment to average home price in the second quarter, reaching or tied highs not seen at least since 2005.
More than half of the advance payments on funded home purchases were $ 25,000 or more in the second quarter, up 35.1% from the $ 18,500 average in the first quarter.
The average down payment of $ 25,000 was 7.4% of average second-quarter sales, up from 6.1% in the first quarter and 5% a year earlier.
The ATTOM report also showed that the number of purchases from the first to the second quarter increased in 197 of the 218 metro districts it monitored.
Among 53 metropolitan areas with populations of more than 1 million, Virginia Beach, Virginia, experienced the largest growth (up 103.9%); Raleigh, North Carolina (up 61.8%) Oklahoma City (up 60.2%); Birmingham, Alabama (up 59.7%) and Richmond, Virginia (up 58.4%).
Among the major metros, the largest drop was in Atlanta (down 43%), St. Louis (down 19.7%); Salt Lake City (down 16.8%); Memphis (-3.3%) and Pittsburgh (-3.1%).