Bank of America pegs 2027 mortgage volume at $1.72T, warns of 2023-style housing replay

Bank of America projects muted mortgage growth in 2027, with total originations reaching $1.719 trillion and only about $344 billion coming from refinances, according to a report released Friday. The bank’s analysts said their outlook is “slightly lower” than other industry forecasts because they expect weaker housing market conditions and home sales, along with “a marginally higher projected year-end rate level.” Their 2027 forecast is the third major call for origination volume to remain below $2 trillion next year. The Mortgage Bankers Association (MBA) expects total single-family originations to fall 5% to $1.99 trillion in 2027. Fannie Mae is forecasting $1.86 trillion for next year. BofA’s forecast represents a decline of 15% compared to the $2.030 trillion expected for 2026. It assumes a 10-year Treasury yield average of 5.25% in 2027, a 2.5% year-over-year decline in existing home sales, an 0.5% increase in new home sales and a 1% rise in full-year home price appreciation. Secondary market On the capital markets side, BofA analysts expect agency mortgage-backed securities gross issuance of a little more than $1.12 trillion in 2027, down from about $1.33 trillion this year. ...