MBA Chief Economist: Home Purchase Market Strong in 2016
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WASHINGTON, D.C. (December 16, 2015) - - 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.