NEW YORK (TheStreet) -- Mortgage originations could fall 32% in 2014 as refinancing volumes continue to plunge, the Mortgage Bankers Association said on Tuesday.
Total originations are expected to drop to $1.3 trillion from an estimated $1.7 trillion in 2013. While loans to finance the purchase of homes are expected to climb 9% to $723 billion in 2014 on the back of higher home sales and home prices, refinances could drop as much as 57% to $463 billion from $1.08 trillion.
Although the government's Home Affordable Refinance Program will remain open until the end of 2015, the scope for further refinances under the program is limited, according to Jay Brinkman, chief economist at MBA.
"While on paper the number of HARP-eligible borrowers appears large, the reality is these borrowers have been unresponsive to numerous attempts to encourage them to participate in the program and are less likely to do so now that rates have gone up," he said.For 2015, originations are forecast to drop slightly to $1.2 trillion, with the mix further shifting towards purchase loans. The MBA predicts the 30-year mortgage rate would increase above 5% in 2014 and would rise to 5.3% in 2015. -- Written by Shanthi Bharatwaj New York. >Contact by Email. Follow @shavenk
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV