Source: firsttuesday Journal —
Following record lender profits in 2021, 2022 has mortgage lenders packing their bags and heading for the exits.
The Mortgage Bankers Association (MBA) believes the U.S. will enter a recession in the first half of 2023. The MBA expects national home prices will flatten in 2023-2024, with some regional markets to decline (by most accounts a fairly optimistic forecast).
The MBA forecasts mortgage origination volume to decline from the expected $2.26 trillion in 2022 to $2.05 trillion in 2023. This includes a reduction of:
- 3% in purchase originations; and
- 24% in refinances.
This anticipated drop is on top of the huge cut to mortgage originations which occurred in 2022 relative to 2021. Total one-to-four unit single family residence (SFR) mortgage originations topped $4.44 trillion in 2021, on track to fall to $2.26 trillion in 2022, according to the MBA.
Despite a cornucopia of consistent data pointing to an ongoing reduction in mortgage originations, 2022’s “quick cut” has apparently caught mortgage industry leaders by surprise, leaving them to hastily prepare for the rollback in originations.
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