The rate at which individual markets generate purchase mortgages will fall to levels not seen since the early 90s, according to iEmergent’s 2009-2013 Mortgage Volume Forecasts released today.
And while the company believes purchase mortgage lending volume will bottom out late next year, it’s not expected to recover to long-term historical trends until 2012.
For 2009, iEmergent expects total purchase volume of 4.29 million loans valued at $707.7 billion, likely aided by a rising number of distressed sales.
Refinance volume is estimated to range from 3.29 million to 3.66 million loans valued at $575 billion to $640 billion.
Total mortgage volume for the year is expected to be in the range of 7.58 million to 7.95 million loans, worth $1.28 trillion to $1.35 trillion.
That represents about a five percent decline compared to year-end estimates for 2008, though the company stressed that trends will vary widely among individual markets.
“We expect the total volume to reach the bottom in 2009 and turn upward in 2010, but lenders should be prepared for volumes in many of their local markets and communities to drop even further if the recession deepens, unemployment levels continue to rise, home prices fail to stabilize and consumer confidence remains dismal,” said Dennis Hedlund, president of iEmergent.
Southland Home Sales Reach October High
A total of 21,532 new and resale homes and condos sold in six Southland counties in October, up five percent from September and a record 66.7 percent higher than in October 2007, according to DataQuick.
However, 51 percent of Southern California resales had been foreclosed on at some point in the past year, which may explain why October home sales were the highest in 20 months.
Despite that, it was still the slowest October since 1996, as last month’s sales were 12.4 percent below their 21-year average.
The median sales price, the point where half of the homes sold for less and half for more, fell to $300,000, the lowest point since it was $298,000 in April 2003, and about 40 percent lower than its peak last summer.