2019 may be a good year for lending,expert says
Total home-loan volume could climb 3.9% this year, according to mortgage forecasting and advisory firm iEmergent.
Other mortgage top dogs also predicted a gain, with Freddie Mac’s March mortgage finance forecast projecting a gain of 1.5% for total mortgage lending, and the Mortgage Bankers Association anticipating a 1% increase. Fannie Mae bucked the trend, predicting a half-percentage-point decline.
Home sales expectations caused the difference in outlooks, said iEmergent Forecasting Director Mark Watson. He predicted that home purchase lending would go up to $1.2 trillion this year due to the recent low interest rates.
“We think the lower mortgage rates will create a huge push, partly from millennial buyers, that’s going to support strong growth in home sales over the next several years,” said Watson.
Fed Chairman Jerome Powell said in March that there would be no rate hikes in 2019. Watson pointed out that the low inflation rate gives the Fed an option to hold interest rates.
“It looked for a period of time like inflation was going to go over the Fed’s 2% target,” said Watson. “Then it dipped down, and that gave the Fed a lot of cover to say we’re going to slow down on rates rises.”
