MBA increases mortgage projections for 2011

8/22/2011

The Mortgage Bankers Association increased residential mortgage projections for 2011 last week.

Lending activity increases may be due to two factors: First, the U.S. Federal Reserve announced earlier this month that interest rates would be held at the current low percentage for over a year in the interest of aiding the slow economic recovery of 2011. Secondly, and partly due to the Fed's announcement, refinancing numbers have significantly increased.

"For the market as a whole, we are now projecting total mortgage originations to be $1.1 trillion in 2011, up about $100 billion from our earlier projection," said Jay Brinkman, Mortgage Bankers Association senior vice president of research and education and chief economist, "and $931 billion in 2012, down about $30 billion from our prior estimate."

The lower numbers for 2012 may be because of this summer's volatile stock market, but if the housing and real estate industries show signs of recovery, that projection may improve.

"The silver lining in all the turmoil for our industry is that mortgage rates are once again at or approaching historic lows," Brinkman said of the fluctuating numbers.

Whether interested in refinancing or planning to expand, businesses may find today's commercial lending situation in their favor compared to previous quarters.