Purchase originations are forecast to rise 7.7% to $1.46 trillion, while refinance activity is expected to jump 9.2% to $737 billion. By loan count, total mortgage originations should reach 5.8 million in 2026, up from 5.4 million this year.
Fratantoni pointed to a mix of lower mortgage rates and flat home prices as drivers of improved affordability, but cautioned that “the increase in inventories will put downward pressure on home prices across the country. Home-price declines nationally are expected to decline for several quarters over the next few years.”
He also flagged that “the risk of growing budget deficits and elevated inflation expectations will keep longer term rates from falling further, even as the Fed cuts short-term rates.”
Regional disparities shape market outcomes
Joel Kan, MBA’s deputy chief economist, highlighted the location-specific nature of housing trends.
“Growing housing inventory in markets such as Florida, Colorado, and Arizona have led to annual home-price declines, while tight inventory and challenges to homebuilding in the Northeastern and Midwestern states such as New York, Connecticut, Illinois, and New Jersey drive price appreciation well above the national average,” Kan said.