Each year, the Mortgage Bankers Association, or MBA, publishes its annual forecast for the upcoming year’s mortgage originations. The forecast was publicly released at the 2021 Annual Convention & Expo. Specifically, it forecasts total mortgage originations for both purchases and refinances to reach $2.59 trillion in the upcoming year. This equates to a decline of 33 percent from 2021. Looking further, the decline is expected to continue for 2023. At that time, the anticipated mortgage originations will total $2.53 trillion.

The Mortgage Bankers Association breaks up its forecast into projections for purchase originations and refinance originations. While the overall value of mortgage originations is expected to decline substantially for 2022, the purchase mortgage originations are projected to increase at a record level. The total volume of purchase mortgage originations may reach $1.73 trillion in 2022, which equates to growth of 9 percent. Record growth is anticipated to continue in 2023 as well.

Notably, the forecast for refinance originations is expected to continue plummeting. For 2022, it forecasted a decrease in refinance originations of 62 percent. This equates to $860 billion. Its forecast for the preceding year was a decline of 14 percent, which equates to $2.26 billion. A decline in refinance originations is expected for 2023 as well. This may be due to fewer eligible homeowners and higher interest rates.

The MBA’s forecast for originations in 2022 makes several assumptions. It assumes that challenges related to supply chains and the labor shortage will continue throughout at least most of 2022. Likewise, it assumes that these factors may contribute to a continued high level of inflation and reduced consumer spending. Because of these factors, it anticipates that the Federal Reserve will increase short-term rates at some point in 2022 and that asset purchases will decline throughout the year. Notably, the rate for a 30-year fixed interest rate at the end of 2021 may be 3.1 percent. By the end of 2022, this number is expected to be 4 percent.

The strength of the housing market will also affect mortgage originations in 2022. The supply constraints for building materials may be overcome by builders, and this will support greater fulfillment in the demand from buyers. Because of this and an expected increase in the number of homes listed for sale, the acceleration of sales prices and home values may slow.

It is important to note that the availability of mortgage credit is approximately 30 percent below pre-pandemic levels. This means that it is more difficult for qualified buyers to get financing for a new home purchase. The projections assume that mortgage supply may increase slightly. This can make it easier for first-time homebuyers to qualify for a mortgage.

Do you have questions about projections for 2022 mortgage interest rates? Are you interested in learning about the loan terms you may qualify for today? The MortgageDepot team is available to answer your questions and can assist with your prequalification.

Contact one of our loan consultants to learn more.


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