Mortgage projections get some major updates

Substantial changes in mortgage market predictions are being announced by credible analysts.

For example, the Mortgage Bankers Association released its updated mortgage finance and economic forecasts. The revision included a significant increase in the volume of purchase originations.

MBA now projects that purchase originations will reach $801 billion in 2015 and $885 billion in 2016. That is an increase of $71 billion and $94 billion, respectively, over the association’s previous forecast.

Mike Fratantoni, MBA’s chief economist, explained the reasons for the update in mortgage projections this way:

“The housing market recovery has shifted to a higher gear. We have revised upward our estimates and forecasts for home sales and home prices, and the cash share of purchases has declined. All of these factors point to higher levels of purchase originations.

“Revisions to our purchase origination forecast in July result from changes in our expectations about the rate at which purchase applications and housing sales translate into dollars of mortgage originations.

“As a result of the changes outlined, purchase originations are now expected to increase to $801 billion in 2015, an upward revision from $730 billion in last month’s forecast, and from $638 billion in 2014. For 2016, we increased our forecast to $885 billion in purchase originations.

“More sales are being financed, and more applications are being approved. And we expect that this trend will continue into 2016 and beyond as the broader economy and job market continue to improve.”