As we enter the new year, it’s a good time to look at the mortgage origination trends for purchase transactions and refinances. According to the Mortgage Bankers Association’s (MBA) December Mortgage Finance Forecast, total volume for one- to four-family mortgage loan originations is expected to drop in 2017 thanks to higher interest rates and a continually slow refinance market.

Purchase Mortgage Origination Volume

Purchase mortgage origination volume should continue on its upward trend, the MBA reported, thanks to “strong household formation coupled with further job growth, rising wages, and continuing home price appreciation.” Though purchase origination forecasts for the first quarter were revised down between November and December, the predicted $1.10 trillion in purchase originations for the year would be an 11 percent increase from 2016 and the most since 2007. While purchase mortgage origination volume has risen steadily since 2011, from a low of $500 million to near $1 trillion in 2016, refinance volume has seesawed since the housing crash.

A Short-Lived Refinance Boom

An increase in refinance volume in 2012 was followed by decreases in 2013 and 2014. And despite the “mini refi boom” of 2016, the MBA predicts that the next several years (2017 – 2019) will see refinance volume drop steadily from $479 billion in 2017 to $395 billion in 2019. if mortgage rates climb much higher, fewer homeowners will have an incentive to sell their existing home and purchase a new one; roughly two-thirds of existing mortgages sit at a rate of under 4.5%.

How Lenders and Realtors can Plan for the Future

The supply and demand fundamentals of the housing market remains strong. Although mortgage costs may rise, incomes may continue rising as well. Lenders and realtors will have to focus their efforts on an increasing number of Millennials now entering the housing market.
With refinance volume dropping, lenders will have to rely more on purchase transactions, which means partnering with a title agency that simplifies mortgage transactions for all parties involved. As a one-stop solution for real estate transactions of all kinds—no matter the size, complexity, or geographical location of the relevant properties – Acuity Real Estate Solutions is that title agency.

Partner with Acuity National Real Estate Solutions in 2017

Acuity National Real Estate Solutions is an attorney-owned, client-focused national title agency that is redefining what a title agency can be. By automating labor-intensive steps in mortgage transactions and offering superior customer service, we have become the trusted title partner for high-volume lenders across the country. To learn more about our services, visit our homepage today!

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