Mortgage loan originations for 2004 should total $2.7 trillion, but decline to $2.1 trillion next year, according to the chief economist of the Mortgage Bankers Association.At a press briefing at the group's annual convention in San Francisco, Doug Duncan noted that the 10-year Treasury note is trading at around 4%. Typically mortgages price 150-to-165 basis points above that. Mr. Duncan forecast that by the end of this year the 10-year yield will be at 4.3% and the 30-year fixed mortgage rate at 5.9%, and that by the end of next year the mortgage rate will be up to 6.5%. When asked about a possible bubble in home prices, Mr. Duncan noted that home sales are up, while the inventory of properties going on the market is down, indicating a constraint on supply. He said it is hard to see where an across-the-board collapse would come from, but that there could be a decline in some markets.

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