Advertising

The Seattle Times Company

NWjobs | NWautos | NWhomes | NWsource | Free Classifieds | seattletimes.com

The Seattle Times

Business / Technology


Our network sites seattletimes.com | Advanced

Originally published October 17, 2007 at 12:00 AM | Page modified October 17, 2007 at 2:02 AM

E-mail article     Print view

18% fall seen in '08 mortgage originations

The nation's more than $2 trillion home-mortgage business won't halt its slide anytime soon, with mortgage originations expected to fall...

The Associated Press

BOSTON — The nation's more than $2 trillion home-mortgage business won't halt its slide anytime soon, with mortgage originations expected to fall 18 percent next year and decline an additional 6 percent in 2009, the Mortgage Bankers Association (MBA) predicts.

And although a forecast scheduled to be released today at the organization's annual convention offers no hope that a housing turnaround is near, the industry still foresees a future for the subprime market that helped trigger the broader downturn, the MBA's chief economist said.

"It will come back," Doug Duncan said in an interview in which he described a shift to far stricter lending standards for people with spotty credit.

The gloomy mortgage outlook is driven by the shrinking flow of cash to lenders from increasingly risk-averse investors, as well as slower overall economic growth.

"We have not yet seen fully the impact of the credit shock to the U.S. and world economies, and the severity of that impact will depend on how long it takes for the markets to return to normal functioning and where credit spreads ultimately settle," Duncan told reporters in a preview of his speech today.

Total mortgages written are expected to decline nearly 15 percent this year to $2.31 trillion from $2.73 trillion last year. Originations are expected to fall at a slightly steeper 18 percent next year, then begin to decline at a slower 6 percent rate in 2009.

The erosion is expected to ease as a projected 5 percent rise in mortgages for people buying homes in 2009 partially offsets an expected 18 percent drop-off that year in mortgages for homeowners who refinance.

The 2009 increase in originations is based on the MBA's expectations that home sales and prices will begin picking up that year.

The MBA expects sales to hit bottom in the third quarter of next year, after existing-home sales decline a projected 12 percent this year to 5.72 million units sold. Existing-home sales are expected to decline a further 10 percent next year before growing by 5 percent in 2009.

The MBA forecasts a 2 percent home-price decline both this year and next year, with prices flattening out in 2009.

With the national glut of homes for sale, "any significant increase in homebuilding is probably years off," Duncan said.

Copyright © 2007 The Seattle Times Company

More Business & Technology headlines...

E-mail article Print view      Share:    Digg     Newsvine

advertising

An 802.11n upgrade could make a big difference

Retailers opening doors on Thanksgiving Day

Google makes concessions on digital book deal

Critics want to block Comcast-NBC deal

Google submits revised book settlement

Advertising

Video

Opening day at Crystal Mountain
Skiers crowded the slopes at Crystal Mountain for one of the resort's earliest openings.

Video shows violent arrest by SPD
Fort Lewis Memorial
Highlights: Ken Auletta talks about "Googled"
Seattle International Cabaret Festival
Ken Auletta talks about "Googled"
Medal of Honor
Pelosi answers questions at Swedish Medical Center
Pelosi speaks at Swedish Medical Center
"Pistol" Pete Ryan

Marketplace

nwautos

2009's most fuel-efficient sedansnew
Choosing a new sedan? Weigh the impact of your choice on your wallet and on the planet.
Post a comment

Open Houses

Find this weekend's open house listings.
Or search by location:

 
Most read
Most commented
Most e-mailed
 
 
Advertising