Advisory firm iEmergent is forecasting that total U.S. mortgage volume for purchase loans will reach $782.6 billion this year – an increase of about 10% compared with 2014.
The firm's updated 2015-2019 U.S. Total Mortgage Volume Forecast says the industry will originate a total of about 3.33 million purchase loans this year.
Total refinances for the year will be in the range of $305.9 billion to $384.0 billion, or 1.41 million loans to 1.77 million loans.
Total purchases for the year will be in the range of $1.088 billion to $1.167 billion, or 4.74 million loans to 5.10 million loans, the firm forecasts.
Although ‘mortgage lending activity will rise modestly’ this year, ‘the refinance range will continue to be weak and volatile,’ the firm says in a release.
The firm cautions, however, that the size of the gain is ‘uncertain, as interest rate increases, global economic uncertainty and credit availability still threaten to minimize the overall improvement in the housing market.’
‘Even though we are seeing some signs that housing is slowly recovering, there are still many factors and forces at work that could make for a very turbulent year,’ says Dennis Hedlund, founder of iEmergent, in a statement. ‘On one hand, home prices are slowly rising, interest rates still remain low, and job growth seems to be steady – all of which bode well for housing. Yet, if even one of those factors is removed from the equation or credit availability remains tight despite new initiatives to help first-time home buyers or those with limited savings, housing could easily sputter backward, and recovery would stall for a period, once again.
‘Even if the composite U.S. housing market looks like it's starting to stabilize, there will be vast differences in how individual markets and communities will behave across the country,’ Hedlund adds. ‘Some communities are already on a solid path to recovery, while others will still struggle to find a foothold in 2015.’
The firm emphasizes that it is ‘important to understand forecasts at a market level.’
‘Housing affordability, overall household demographics and market-specific boom-to-bust volatility from 2005 to 2013 impact how individual markets will change from 2014 forward,’ the firm states in a release.
Based on the firm's current forecast, Florida, New Mexico and Maryland will see increases of more than 14% in purchase dollar volume this year compared with 2014, while Montana, Iowa and North Dakota will see gains of less than 3%.
Three of the top five markets for purchase dollar growth during the next five years include Palm Coast, Fla.; Naples-Marco Island, Fla.; and Orlando, Fla.Â
The firm's updated Mortgage Volume Forecast will be posted to Mortgage MarketSmart this Friday, Aug. 21.