MBA Chief Economist: Home Purchase Market Strong in 2016

WASHINGTON, D.C. – December 17, 2015 – (RealEstateRama) — Mike Fratantoni, MBA’s Chief Economist and Senior Vice President for Research and Industry Technology, offered the following statement in response to the Federal Reserve Federal Open Market Committee (FOMC) announcement that it would begin to increase interest rates:

“MBA has been projecting a rate increase all year and we have factored rising mortgage rates into our 2016 mortgage finance forecast. Due to the strength of the economy, we still project 10 percent growth in the purchase market in 2016, despite gradually increasing rates.

“Overall, mortgage origination volume will be down next year due to a reduction in refinances, but the positive impact of the improving economy on home purchases will offset the reduction. From a mortgage market perspective, as we move forward, it will also be important to carefully monitor the Fed’s plans with respect to their balance sheet investment in MBS.

“Today’s vote signaled confidence in the future growth of the economy. The unemployment rate is at 5%, employment is growing, and core CPI inflation is running at 2%. By any measure, the economy is close to meeting the Fed’s targets, and it is time to raise rates above zero.”

MBA releases monthly mortgage finance and economic forecasts and commentary. You can access the current forecasts and commentary by clicking here.

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Ali Ahmad

(202) 557- 2727

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field.

Contact:

Mortgage Bankers Association
1331 L Street, NW
Washington, DC 20005

Phone: (202) 557-2700

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