Annual mortgage origins are set to exceed $ 4.1 trillion for the first time as more refinances are made this year than total loans granted in 2019, Fannie Mae said.
Fannie Mae's most recent forecast is for refinancing origins of $ 2.6 trillion in 2020 and a purchase volume of $ 1.5 trillion. Originations totaled $ 2.46 trillion last year, with $ 1.3 trillion from home purchases and $ 1.1 trillion from refis.
The best year on record so far was 2003 with a total volume of 3.7 trillion US dollars, according to Fannie Mae.
But 2020 isn't going to be a record year for either refis or purchases, although it will come close in both categories. In 2003, there were $ 2.7 trillion in refis, while 2005 was the best year for purchases at $ 1.51 trillion.
In his September forecast, Fannie Mae forecast a total volume of US $ 3.87 trillion for the year, of which US $ 2.4 trillion for refis and US $ 1.4 trillion for purchase volume.
Earlier this week, Freddie Mac forecast a volume of $ 3.6 trillion in 2020. The Mortgage Bankers Association will release its October forecast at its meeting next week. The September forecast was more conservative than Fannie Mae's, calling for $ 3.14 trillion that year.
Some of the refinancing activity forecast for 2020 has been postponed upwards from 2021, so Fannie Mae lowered its refi forecast for the next year by $ 20 billion to $ 1.058 trillion.
However, the overall guidance for 2021 has been raised from $ 2.57 trillion to $ 2.62 trillion as the buying market has strengthened, even if inventory shortages are expected to persist.
Fannie Mae has slightly raised its mortgage rate forecast for the next year, calling for an average of 2.8% for the 30-year fixed-term loan. last month, a rate of 2.7% was forecast by the end of 2021.
"Housing continues its perennial theme of historical supply bottlenecks," said Doug Duncan, chief economist at Fannie Mae, in a press release. "Strong demand-side drivers, including low mortgage rates and an increase in millennials looking to buy homes, are helping to boost property prices significantly as many older homeowners continue to age on the spot and other potential home sellers adopt more conservative attitudes due to COVID 19 concerns about what will further limit the offer. "
If anything, current homeowners are playing a game of "musical chair housing" by selling their properties to one another, which is affecting market dynamics, said Mark Fleming, chief economist at First American Financial, in the company's September press release on the potential home sales model .
"The rapid appreciation in house prices and its impact on existing and first-time home buyers will continue until the supply-demand imbalance begins to improve," said Fleming. "In the game of accommodating musical chairs, it is clear that the housing market needs more chairs."