The Mortgage Bankers Association projects mortgage volume will fall below $2 trillion in 2027 as interest rates remain elevated, according to the trade group's forecast.
The MBA anticipates higher-for-longer borrowing costs will persist through the coming years. The organization also expects wider spreads between various loan products and potential additional rate increases from the Federal Reserve.
Current market conditions point toward sustained pressure on mortgage origination volumes. The 7% rate environment referenced in the forecast reflects expectations that borrowing costs will remain stubbornly high rather than declining sharply in the near term.
The projection carries implications for lenders and the broader housing finance sector. Mortgage origination volumes at levels below $2 trillion represent a contraction from historical averages and indicate slower lending activity in the years ahead.
The MBA's outlook factors in Federal Reserve policy decisions and economic conditions that could drive further rate increases. Wider spreads suggest lenders face compressed margins in an environment where borrowing costs remain elevated relative to funding costs.
The trade group's forecast provides guidance for industry participants preparing for a period of constrained mortgage volume and reduced lending opportunities. Lenders may need to adjust business strategies and staffing levels in response to anticipated lower origination volumes.
The forecast underscores ongoing challenges in the mortgage market as the industry adapts to a higher rate regime following years of historically low borrowing costs.