“Home loans to reach $3.2-T in 2020, Most in 17 yrs“– Paul Ebeling
US home mortgage originations are forecast to total $3.18-T this year, the most since Y 2003, as low rates drive a spike in refinancing and purchases, according to the Mortgage Bankers Association (MBA).
Housing activity has soared since the onset of the Covid-19 chaos, driven by record-low interest rates and a desire for more space to quarantine.
Loan originations are expected to fall to about $2.50-T in Y 2021, still that would be the 2nd highest mark in 15 yrs, the MBA reported Wednesday.
The economy, labor market, and housing market have all seen strong rebounds since the onset of the medical emergency chaos, though there is some lingering uncertainty, but this is a yr of continued purchase growth and refinance activity.
Purchase originations are forecast to reach $1.54-T next year, besting the prior record of $1.51-T set in Y 2005.
As long as the spread of The China Act of War Virus is brought under control, the economy will like expand 3.5% next year, allowing the job market to improve, incomes to rise, and home sales to increase.
“I am positive active real estate market is good because of the multiple industries and employment that feed off of home sales, from finance to home improvements, including remodeling. Increasing real estate values also is an excellent indicator for the continuation of an economy recovery plus it has a strong positive, mental impact to the buyer. It shows consumer confidence which is critical for consumer spending.
“Most importantly, it further shows that the current administration made the right decision in causing interest rates to remain low and inflation to be manageable, again both necessary to cause and perpetuate an economic rebound,” says economist Bruce WD Barren.
Have a healthy day, Keep the Faith!