The Mortgage Bankers Association (MBA) predicts housing demand will rebound next year as high mortgage rates, which have recently reached over 7%, eventually fall due to a mild recession. MBA's housing market forecast anticipates a 19% increase in mortgage originations in 2024, reaching 5.2 million loans, up from the 4.4 million projected for 2023.
The origination volume is expected to surge 19% to $1.94 trillion in 2024, compared with $1.64 trillion in 2023, according to Insider. Lower rates are expected to stimulate homebuyer demand and encourage existing homeowners to sell, but inventory is expected to remain tight, and as a result, home price appreciation could continue to surge in the coming years.
"Lower rates should help boost both homebuyer demand and increase the inventory of existing homes, thereby supporting purchase origination volume in 2024," MBA chief economist Mike Fratantoni said in a statement.
Not only will this incentivize homebuyers to return, it will help add housing supply, as current owners will be more willing to sell their home. Many have remained off the market this year, preferring the cheaper mortgage rates they currently hold.
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