The Mortgage Bankers Association is increasing its forecast for mortgage originations to $1.28 trillion for 2012 due to an increased demand for refinancings.
According to MBA, mortgage rates are expected to remain at their low levels in part due to Europe's credit crisis. This could spur additional demand for home loans in the coming months.
Mortgage rates for the week ending May 24 reached 3.78 percent for 30-year fixed-rate mortgages and 3.04 percent for 15-year FRMs, according to Freddie Mac.
Mike Fratantoni, vice president of research at the MBA, noted the revised numbers were not largely attributed to the Home Affordable Refinance Program, which provides government refinancing aid for borrowers. This was largely attributed to the market's low mortgage rates which have provided incentive for borrowers to refinance without assistance from HARP.
"We factored HARP lending of roughly $100 billion in both 2012 and 2013 into our April forecast, and the HARP share of refinance activity has remained relatively constant over recent months," said Fratantoni.
