We’re only two weeks into the new year (and decade) and the predictions are flowing…just not the good kind.
The Mortgage Bankers Association said today it expects residential mortgage originations to fall 40 percent in 2010 from last year to their lowest level in a decade.
The group believes banks and mortgage lenders will originate just $1.28 trillion in home loans in 2010, down from $2.11 trillion last year.
The anticipated total would be the lowest since 2000, when a paltry $1.14 trillion was recorded (per Reuters data).
It’s slated to get even worse in 2011, with just $1.22 trillion in home loan lending volume expected, before reversing course and climbing to $1.4 trillion in 2012.
Refinancing accounted for roughly 65 percent of total activity last year, but is only forecast to grab a 40 percent share this year.
Perhaps because the MBA sees 30-year mortgage rates increasing throughout the year to end 2010 at a not so desirable 6.1 percent.
Meanwhile, purchase mortgage activity will see a less-than five percent rise from 2009, before really taking off in 2011 and 2012.
The news spells trouble for those hired just to handle the surging loan volumes in 2009, as banks will surely need to “rightsize” staff.