Last week, the Mortgage Bankers Association released its predictions for rates and loan originations in 2014 and 2015. Jay Brinkmann, MBA’s Chief Economist and Senior Vice President for Research and Education, released the following statement highlighting key points of the forecast:
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“We are projecting home purchase originations will increase in 2014 due largely to gains in home sales and home prices. We expect to see a decline in the share of sales paid for with cash, and higher average LTVs on purchase mortgages, due to the rise in home prices.”
“We expect mortgage rates will increase above 5 percent in 2014 and then increase further to 5.5 percent by the end of 2015. As a result, mortgage refinancing will continue to drop, and borrowers seeking to tap the equity in their homes will be more likely to rely on home equity seconds rather than cash-out refinances.”
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