Like both Freddie Mac and Fannie Mae, the Mortgage Bankers Association (MBA's) is anticipating that mortgage originations in 2018 will not match up to those this year.  MBA said it expects to see a year-over-year decline from $1.69 trillion in 2017 to $1.60 trillion.

Freddie Mac's bottom line is quite similar, a total of  just under $1.70 trillion next year, but they see a much higher total for 2017, 1.80 trillion, and thus a sharper drop.  Fannie Mae forecasts the total for this year at $1.79 trillion, declining to 1.72 trillion next year.

MBA, which released its forecast on Tuesday in conjunction with its annual convention and expo, anticipates that purchase mortgage originations will grow by 7.3 percent, to a total of $1.2 trillion. Refinance originations however, are predicted to be at $430 billion, a 28.3 percent drop.

The predictions from the two GSEs are updated monthly.  Fannie Mae's most recent forecast was for $1.13 trillion in purchase originations and $662 billion in refinancing in 2017 and $1.18 trillion and $538 billion respectively in 2018. Freddie Mac does not break its forecast down the same way, but is expected refinancing to have a 33 percent share this year and 26 percent next year. This translates into purchase origins totaling $1.21 trillion and $1.14 trillion, and refinancing at $594 billion and 557.7 billion.

For 2019, MBA is forecasting total originations to rebound to $1.64 trillion, based on an increase in purchase originations to $1.24 trillion while refinancing declines further to a volume of $395 billion.

Michael Fratantoni, MBA's Chief Economist and Senior Vice President said, "We are projecting that home purchase originations will increase at a faster clip in 2018, nearly double the rate that they increased in 2017. The housing market has been hamstrung by insufficient supply, with inventories of homes remarkably low given the home price growth we have experienced.  The job market remains strong, demographic trends are quite favorable, mortgage credit is becoming more available to qualified borrowers, and home prices should continue to rise. All the pieces are in place for stronger growth in 2018 and beyond." 

"Our projection for overall economic growth is 2.0 percent for 2018, slowing slightly to 1.9 percent in 2019 and 1.8 percent in 2020. We still expect long run growth potential in the US to be somewhat lower, as productivity gains have been persistently slow.

"Although inflation remains low, a tight job market is likely to increase inflationary pressures in the near term.  We expect the Fed will raise rates in December 2017, 3 times in 2018, and twice in 2019.   The Federal Reserve has begun reducing the its holdings of Treasury securities and mortgage backed securities, and this will put additional, modest upward pressure on mortgage rates.  We expect that the 10-Year Treasury rate will stay below three percent through the end of 2018, and 30-year mortgage rates will stay below 5 percent.

"We forecast that monthly job growth will average 125,000 per month in 2018, down from about 150,000 per month in 2017, and that the unemployment rate will decrease to 4.0 percent by the end of 2018." Fratantoni said.