Economists at the Mortgage Bankers Association have lowered their forecast for 2014 mortgage originations by $57 billion to $1.12 trillion.
That means lenders can expect to see a 36% drop from 2013 when originations totaled $1.58 trillion.
“Despite an economic outlook of steady growth and a recovering job market, mortgage applications have been decreasing—likely due to a combination of rising rates and regulatory implementation, specifically the new qualified mortgage rule,” says Mike Fratantoni, MBA chief economist.
Under the new MBA forecast, 2014 purchase mortgage originations will total $677 billion, up just 3.8% from last year. Refinancings will plummet to $440 billion from $967 billion in 2013.
Fratantoni unveiled his 2014 forecast at MBA’s annual convention in late October.