Size Of Mortgage Refi Market Drops $1 Trillion In 2021

The MBA’s latest market outlook is here. The table above is for you data geeks, and below I offer quick comments on housing and lending market trends as we go from 2020 to 2021. This includes thoughts on home prices, total home sales, mortgage rates, and size of mortgage mortgage market in 2021.

– Existing home prices will go from $293k this year to $297k in 2021.

– New home prices are slightly higher at $331k this year and $333k in 2021.

– That’s a decent sign affordability could stay in line next year.

– Total homes sold will go from 6.42m this year to 7.17m next year.

– That’s a decent sign home buyers have a bit more to choose from.

– It also means lenders will have more deals.

– But they won’t have 7.17m deals because not every home is financed.

– The MBA predicts lenders will make 5.37 million home purchase loans next year.

– Lenders, let that sink in: there are 5.37 million purchase loans for the whole industry.

– Meanwhile refi volume will go from $1.97 trillion to $971 billion.

– That’s a truly massive swing in the size of mortgage mortgage market.

– It’s $1 trillion less refis next year.

– But still: it’s almost $1 trillion in refis next year. Not bad!

– A key reason: mortgage rates may go from under 3% this year to mid-3% next year.

– Rates rise as the economy improves which makes more people able to buy homes.

– And if prices aren’t rising as fast, sellers might be more motivated instead of holding out.

– This is partly why the outlook calls for more home sales.

– Existing home sales will grow from 5.58m this year to 6.21m next year.

– New home sales will grow from 839k this year to 960k next year.

– This is 87% existing homes and 13% new homes sold both years.

– Size of mortgage mortgage market will drop from $3.39t this year to $2.56t next year.

– As noted above, the drop is in refi volume.

– Mortgage purchase volume actually grows from $1.42t this year to $1.59t next year.

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For you home buying and refinancing consumers, these yearly figures help you cut through the BS headlines that scream about spiking rates and home prices.

Here are some related posts that go deeper.

And please comment below with any questions or hit me on twitter @thebasispoint.
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Reference:

– Refi planning for lenders & consumers as rates rise into 2021