Mortgage lending volume was downgraded lower in a set of new forecasts released by iEmergent this week.
The company now believes 2011 purchase money mortgage volume will be just $476.6 billion, while refinance volume is expected to range from $384.8 billion (low estimate) to $465.8 billion (high estimate).
Overall, 4.66 million loans for $903.8 billion are expected at the low end, though the total could be as much as 5.095 million loans for $942.4 billion on the high end.
The latest projections represent a 38 percent decrease in loan origination dollars from estimated 2010 end-of-year volumes.
The company attributed the drop to lower expected loan sizes and a 34 percent decline in projected refinance applications (maybe they wrote this report before mortgage rates plummeted?)
Purchases are estimated to be just 3.4 percent lower than previous estimates.
What will change things?
“Jobs – better jobs – not austerity, are what’s needed to change the situation,” said Dennis Hedlund, President of iEmergent, in a press release.
“Without jobs, the next six months of home financing don’t look very encouraging. For all lenders, this zero-sum competitive environment will get tougher before it gets better,” he added.
The 2011 purchase/refinance split is expected to be approximately 53%/47%, though refinances continue to account for roughly two-thirds of new applications. So go figure.