iEmergent Report: Brief Mortgage Market Forecast for 2018
By Elizabeth Stewart @ Real Estate Daily
November 29, 2017

Mortgage purchase and refinance volume will likely follow similar trends to those we have been seeing for the past few months. Purchase volume is expected to increase as economic factors boost demand, while refinance originations are expected to fall as mortgage rates rise, according to forecasting and advisory firm iEmergent.

Key Takeaways

  • Mortgage purchase volume is forecasted to increase 9.9% over the next four years
  • Refinance originations are expected to fall to around $580 billion
  • Total origination growth is expected to be about 0.7% because of low refinance volume
  • Homeownership, especially among millennials, is forecasted to rise

Context

“For 2018, we expect that the solid economy, robust job market and strengthening household balance sheets will drive healthy increases in the purchase segment,” iEmergent chief analytics officer for Mark Watson told MPA. “For the refinance sector, we see another decline, but not as steep as other forecasters are expecting, due to a still-low mortgage interest rate environment. On balance, 2018’s mortgage origination volume will be little changed from 2017.”

The firm forecasted price appreciation to continue, but at a dampened rate because of low inventory. Although most professionals expect that, iEmergent also predicted that homeownership rates will rise in 2018, largely led my millennials.

“A continuing trend we’re seeing is that traditional banks are becoming less active in mortgage lending as independent mortgage lenders increase their market share,” Watson said. “Independents are also leading the way at expanding credit availability to borrowers with lower FICO scores.”