The real estate finance industry will continue to be a "pillar of economic strength" this year, the Mortgage Bankers Assn. of America predicted at a news briefing last week.
Purchase mortgage originations this year are expected to post the second-best level on record and reach $1.01 trillion, 2% lower than 2002. Refinancing is forecast to reach $763 billion, or 43% of total originations, according to the association.
Mortgage loan interest rates are expected to rise to 6.5% this year, and the increase will "modestly" affect refinancing activity.
The group predicted that nationwide total housing starts will drop by 3% to 1.64 million units, new single-family home sales will fall by 3% to 945,000 units, and existing single-family home sales will decline by 4.9% to 5.3 million units.
New home prices are expected to increase 2.2% this year, and existing home prices are expected to rise 4.8%, according to the forecast.