MBA Forecasts a Rise in Lending for 2015
A new economic forecast from the Mortgage Bankers Association indicates a stronger economy will bolster mortgage lending next year.
Job growth coupled with low interest rates should continue to make investments in single-family rental properties attractive to investors in 2015.
The MBA forecasts $1.19 trillion in mortgage originations in 2015, a 7 percent increase over this year. It predicts a 15 percent rise in purchase originations coupled with a 3 percent decline in refinances.
“The job market has shown sustained improvement this year with robust monthly increases in both payroll jobs and job openings,” said Michael Fratantoni, MBA’s chief economist and senior vice president for research and industry technology.
Real economic growth in the U.S. appears ready to exceed 3 percent for the second half of the year, providing a sound basis for growth in 2015, according to Fannie Mae’s Economic & Strategic Research Group.
This improving economy could mean that investors will face increased competition for homes from owner-occupants as purchase originations rise, although Fannie Mae predicts the increase in home sales next year will be moderate — roughly 5 percent higher than 2014 figures.
The silver lining for rental property investors is that the MBA expects the 10-year Treasury rate to stay below 3 percent next year, which means mortgage interest rates will stay affordable for small to midsized real estate investors who tap B2R Finance to fund their real estate investments.
The recent drop in mortgage interest rates is also expected to entice investors and homeowners to consider refinancing. The MBA said it expects to see a pickup in refinances over the next few months, continuing into early 2015.
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