MBA Forecast: Slow Economic Growth in 2008 Will Be Coupled With Lower Levels of Mortgage Originations in 2008 and 2009
WASHINGTON, DC (January 14, 2008) The Mortgage Bankers Association (MBA) projects that economic growth will continue to slow through the first half of 2008, but expects economic activity will begin to pick up in the second half of 2008 and resume trend-like growth toward the end of 2009. Total mortgage production will be down 16 percent to $1.96 trillion this year from a projected $2.34 trillion in 2007. Total originations should see a further drop of four percent in 2009 to $1.88 trillion.
Following are the key points of the latest MBA forecast:
We expect housing starts and home sales to continue to trend down and reach bottom around the end of the 3rd quarter 2008.
Total existing home sales for 2008 will decline by about 13 percent from 2007 to 4.94 million units. Sales will pick up by about four percent in 2009.
New home sales will decline by about 15 percent in 2008 from 2007 to 666,000 units. We expect sales to increase about seven percent in 2009.
Median home prices for new and existing homes are expected to decline this year, with nominal median prices falling about two percent. Prices should increase by between one and two percent in 2009.
Residential purchase mortgage originations will decline about 18 percent in 2008 to $955 billion from a projected $1.16 trillion in 2007. Given a recovery in sales and prices in 2009, purchase originations should be up by five percent to one trillion in 2009.
