With the housing market now almost fully recovered, more people than ever are applying for new mortgages. Mortgage origination numbers have increased by 10 percent in the last year. In 2014, purchase originations stood at $759 billion, but climbed to more than $821 billion this year. Financial insiders expect the number of mortgage originations to rise even higher and total more than $900 billion by the end of 2015.
However, this good news is tempered somewhat by the news that mortgage refinancing has stalled. While more people are buying homes, fewer people are seeking to refinance their houses. The Mortgage Bankers Association predicts that mortgage refinancing will drop from $630 billion this year to around $415 billion next year. This number is a one-third decline in refinancing mortgages.
The MBA expects these refinancing numbers to continue to fall in 2016 and 2017. It predicts the number of mortgage refinances to stand at $1.32 billion in 2016 and be less than $1 billion in 2017. Even so, new mortgage originations are predicted to increase during those years. The MBA expects these mortgages to total around $987 billion, even as this gain will be offset by the predicted $331 decline in refinancing at the same time.
The MBA notes that mortgage originations increase directly correlates with the improving economy. As more people reenter the workforce, they have more money to spend on housing, as well as consumer goods like cars and appliances. Economic growth is predicted to increase by 2.3 percent in 2016.