A recent pronouncement from the Mortgage Bankers Association was a clear reaction to the increased home sales volume and decrease in liquidity in the US housing market. In a report from cnbc.com, the association is predicting a higher volume of purchases through mortgages for this year compared to figures obtained just last month.
In its report, the expected volume of purchase loans would top $801 billion for 2015, which is a recalculation of the earlier data released for June of $730 billion. For 2014, the total loan purchase volume reached $638 billion.
The report, penned by economists Joel Kan, Lynn Fisher and Mike Fratantoni, observed an increase for the pull through rates due to a myriad of conditions present. Pull through rates are the rate that loan applications become approved and the funds are released. The factors that help push up the rate include lenient underwriting practices conducted by lenders, smaller loan sizes and the decreasing number of buyers transacting via cash only.
Overall, the association expects that total originations and home purchases for 2015 and 2016 would shift 'to a higher gear.' In a report from nationalmortgagenews.com, the projected total value of originations would increase by 23 percent or an equivalent of $1.35 trillion for 2015. They attribute the surge to increasing number of home purchases and increased applications for refinancing of existing loans.
Total mortgage originations for 2016 though are expected to decline. The decline in home purchases and refinancing for the next year was initially forecasted at $1.17 trillion was revised to reflect current increase to $1.26 trillion.
The biggest revision was the aforementioned increase in home purchase volume for 2015. As for 2016, the initial projection for home purchase volume was pegged at $791 billion but was revised to $881 billion in the trade group's latest report.
