Total residential mortgage volume could fall below $2 trillion this year, according to a report released today by market research firm iEmergent.
The company’s “2008 Mid-Year Mortgage Volume Forecasts” predicts purchase money mortgage loan volume of $947 billion on 5.57 million loans.
That includes 5.1 million owner-occupied loans worth $871.5 billion and just under a half of a million non-owner occupied (investment property) loans worth $75.5 billion.
Their total purchase volume forecast represents an 18.3 percent drop in total loan origination dollars from 2007 and a 34 percent decrease from 2006 levels.
“The continued slide in lending activities due to economic conditions, foreclosure levels, tighter underwriting standards, credit issues, capital constrictions, regulatory changes and legislative activity will continue to push back the mortgage industry’s recovery,” said Dennis Hedlund, president of iEmergent, in a release.
“The industry will not get back to ‘normal’ rates of purchase for loans until sometime in late 2010 or possibly even early 2012, which is why it is important that lenders develop their business plans to maximize every dollar and grab market share in the most cost-effective manner possible.”
The company expects 2008 refinance volume in the range of $997 billion to $1.16 trillion on 5.4 to 6.3 million loans.
Total mortgage volume for 2008 is expected to range between $1.9 trillion and $2.1 trillion on 10.9 to 11.9 million loans.
A similar report released by the Mortgage Bankers Association in mid-January estimated purchase volume of $955 billion and total mortgage volume of $1.96 billion, down from an estimated $2.34 trillion in 2007.