iEmergent Forecast Points To Demand-Side Weaknesses

Posted by Orb Staff on June 24, 2010 No Comments
Categories : Residential Mortgage

ent, a Des Moines, Iowa-based market research firm, has issued a second-quarter update to its 2010-2014 Mortgage Volume Forecast. The update reflects a 5.2% drop in both purchase and refinance volume dollars from the first-quarter forecast that was issued in January. The forecast projects that total purchase volume will not exceed $530 billion by the end of the year, which iEmergent attributes to increasingly wary consumers, the shift forward in normal purchase seasonality as a result of ending tax-credit subsidies, a projected rise in mortgage interest rates to the mid-5% range by December, the likelihood that home prices will continue to fall an additional 3% to 6% and a slight decrease in average loan sizes. ‘There are not enough positives to fuel a big upswing in the housing market, because the demand side – U.S. households and homeowners – remain stuck in big negatives,’ comments Dennis Hedlund, president of iEmergent. ‘Job anxieties, extended under- and unemployment, the existence of too much debt, no savings, tougher credit, foreclosures and mistrust of banks are just a few of the negatives that will smother consumer confidence for the rest of the year and likely into 2011." SOURCE: [link=http://www.iemergent.com]iEmergent

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