The Mortgage Bankers Association (MBA) is ending their business year, they will be closed until January 3, with their annual housing and economic forecasts for this and the next three years.
They are predicting that the industry will end 2021 with a total of $3.93 trillion in mortgage originations, down slightly from the $4.1 trillion last year, an all-time record. Purchase mortgages will set a record at $1.61 trillion, $0.1 trillion higher than the previous record set in 2005. Purchase originations are expected to come in at $2.32 trillion, not a record, in fact significantly lower than the $2.63 trillion in 2020, but still the third highest total ever.
Next year won't be nearly as good, as originations are expected to drop to $870 billion and the refinance share of originations from 57 percent to 33 percent. But purchase originations will pick up a lot of the slack, breaking this year's record and reaching $1.74 trillion, bringing total originations to $2.61 trillion. Looking further out, MBA expects the total will remain above $2.5 trillion in both 2023 and 2024.
This year will end with 6.126 existing home sales and MBA expects 6.446 million in 2022. New home sales will come in at 788,000 this year, 924,000 next year, and finally top 1 million again in both 2023 and 2024. Of course, this will require the builders step up production and MBA says they will. The 1.588 million starts this year will rise to 1.662 million next year and 1.700 million in 2023.
Home price growth will drop from an expected 16.1 percent this year to 5.1 percent next year and 4.1 percent the next. The median price of an existing home at the end of 2022 is expected to be $361,700 while a typical new home will cost $405,500. Interest rates will average 4.0 percent next year and hold at 4.3 percent through the end of 2024.
Economic growth is forecast to be at 4.0 percent in 2022, with the unemployment rate declining to 3.5 percent by the end of the year.