Late house payments expected to grow

However, mortgage debt won’t hurt market, economist says.

Higher home financing costs won’t derail the housing market this year, the country’s top mortgage industry economist says.

But an unexpected jump in the number of people late with their home loan payments has analysts taking notice.

“We are forecasting about a 4 percent (annual) growth in mortgage debt outstanding over the next couple of years,” Lynn Fisher, vice president of research and economics for the Mortgage Bankers Association, said during the industry’s annual servicing conference earlier this month in suburban Dallas.

At the end of 2016, there was almost $9.7 trillion in U.S. mortgage debt. By the end of 2018, the mortgage bankers anticipate that will rise to almost $10.1 trillion in home loans.

The Mortgage Bankers Association predicts that new loan originations nationwide will drop about 15 percent this year because of higher interest rates. With mortgage rates moving up, home refinancings are expected to fall almost 50 percent.

Most of the new loans during the next couple of years will be for home buying, Fisher said.

Home purchase loans are forecast to rise about 10 percent this year. The increase will come from a combination of more purchases and higher prices.

“We are forecasting about a 10 percent growth in single-family housing starts for 2017 and a little bit less than that for 2018,” Fisher said.

Along with mortgage costs, home prices will rise this year.

“We are still expecting fairly strong house price growth this year _ about 4.8 percent,” Fisher said. “That should start slowing down a little bit as new housing starts pick up momentum.”

Of course, all those forecasts assume that mortgage rates won’t get out of hand.