The Mortgage Bankers Association, in a new forecast, estimates that residential loan production will total $992 billion this year, a 20% decline from 2011. The biggest driver of the decline is weaker refinancings.
The trade group calculates that for the year just ended mortgage bankers originated $1.26 trillion of new loans. (National Mortgage News has a higher estimate of $1.35 trillion.)
However, MBA chief economist Jay Brinkmann noted refis could get a boost if the government's HARP program takes off and produces more refinancings "than what we have seen so far."
He expects the purchase mortgage market will either be flat or "up some negligible percent."
Brinkmann believes the U.S. economy will grow at a 1.8% rate this year with new employment averaging 150,000 positions a month. He believes such weak growth will not be enough to decrease the jobless rate or spur home buying.
But he expects many renters may start looking to buy a home in 2013. If they jump into the market this year, "that would be a surprise on the upside," the chief economist said.
