MBA Forecasts $2.78T Volume in '05

The Mortgage Bankers Association's forecast for production in 2005 now stands at $2.78 trillion, which would make it the third-best year ever for mortgage volume.At a news briefing before his formal presentation to the group's annual convention in Orlando, MBA chief economist Doug Duncan said home sales will reach record levels once again this year, but will decline moderately in 2006. An indicator to watch is the condominium market, he said. The inventory of condos is 37% higher now than it was at this time last year, while the market time has grown from 3.5 months to 5.3 months. In the fourth quarter, the MBA is predicting that the 30-year fixed mortgage rate will rise to 6.2%, adjustable-rate mortgages will fall to a 26% share of the market, and refinancings will make up 43%. The MBA predicts that production will fall from $775 billion in the third quarter to $612 billion in the fourth. The MBA can be found online at http://www.mortgagebankers.org.