Good morning! I was reading that the Mortgage Bankers Association weighed in with their predictions for 2011 loan volume. There is good news and bad news in their assessment.
First of all, the MBA thinks that total loan volume will amount to about $1 trillion next year. This would be off from an estimated $1.4 trillion this year. Of course I did read somewhere else that expected volume next year will be $1.6 trillion instead. Whatever figure is to be believed, loan originations are still going to be tough for those of us still in the business.
Obviously, the bad news is loan originations may decrease next year from this year's level. The difference is there won't be as much refinancing going on as rates for a 30 year fixed mortgage are projected to rise to 5.75% by the end of next year. The good news is purchase volume (although still modest compared to years past) will continue to increase. For all my realtor friends out there, this is encouraging. My heart goes out to you and I wish you well!
As we move forward, the big unknown is what will the Federal Reserve do? They have strongly hinted that they will step up their purhase of mortgage backed securities again to keep the market jump started. If this does indeed happen, I expect mortgage interest rates to stay low for the next several months.
If you're in the business I'm encouraged by this news. Purchases may pick up and there are less of us out there competing for the business. Hang in there. I've seen some small signs of life recently. Have a great day!