Key facts
- Mortgage origination volume is forecast to fall below $2 trillion in 2027.
- 30-year mortgage rates are expected to stay above 7% through 2027.
- Total single-family mortgage origination volume is projected to decrease 5% to $1.99 trillion in 2027.
- Purchase originations are expected to edge up 0.8% to $1.42 trillion in 2027.
- Refinance originations are estimated to fall by 17% to $571 billion in 2027.
- The MBA forecasts the 10-year Treasury yield will average 5.1% in the fourth quarter and remain near 5% through 2027.
Mortgage origination volume is expected to fall below $2 trillion in 2027, with 30-year mortgage rates projected to remain above 7%, according to a new forecast from the Mortgage Bankers Association (MBA).
Mike Fratantoni, chief economist at the MBA, stated that while rates are expected to decrease from recent highs, they will likely not fall significantly, remaining above 7% through 2027. The forecast projects total single-family mortgage origination volume to decrease by 5% to $1.99 trillion in 2027, down from an estimated $2.1 trillion in 2026.
Fratantoni attributed some of the pressure on mortgage rates to global volatility, which increases perceived repayment risk and widens the spread between mortgage rates and 10-year Treasury yields. The MBA forecasts the 10-year Treasury yield to average 5.1% in the fourth quarter and stay near 5% through 2027.
Persistent inflation, driven by energy price shocks, is a key macroeconomic factor contributing to higher rates. Fratantoni suggested that the Federal Reserve may need to raise rates a couple more times to bring inflation closer to its target.
Regarding loan types, purchase originations are expected to rise slightly by 0.8% to $1.42 trillion in 2027, while refinance originations are predicted to drop by 17% to $571 billion. The total loan count is projected to be 5 million, down from 5.3 million in 2026.
Joel Kan, deputy chief economist at the MBA, noted that the rate lock-in effect continues to discourage homeowners with lower mortgage rates from refinancing or moving. He also indicated that purchase activity might decline more significantly as rates approach 7%.
Marina Walsh, head of industry analysis at the MBA, discussed industry consolidation, noting that approximately 4,600 mortgage companies remain active. Independent mortgage banks (IMBs) have shown positive net production profits for five consecutive quarters as of Q2 2026, a recovery from previous losses, although margins are still below historical benchmarks. Performance varies significantly among lenders, with the top 20% averaging a profit of 122 basis points while the bottom 20% reported an average loss of 76 basis points.