The Mortgage Bankers Association (MBA) announced Sunday that it expects total single-family mortgage origination volume to increase to $2.2 trillion in 2026, up from $2.0 trillion expected in 2025.
Speaking at its 2025 Annual Convention and Expo, Mike Fratantoni, chief economist and senior vice president for research and business development; Joel Kan, vice president, deputy chief economist; and Marina Walsh, CMB, vice president of industry analysis, presented outlooks for 2026.
Purchase originations are forecast to increase 7.7% to $1.46 trillion next year and refinance originations are expected to increase 9.2% to $737 billion. By loan count, total mortgage origination volume is expected to increase 7.6% to 5.8 million loans in 2026 from 5.4 million loans expected in 2025, the presenters said.
Fratantoni said the economy will grow at a below-trend rate over the next year due to a softening global economy and uncertainties over the impacts of higher tariffs.
“The FOMC cut rates in September, and we expect additional cuts at the end of October and in December. While inflation is still above the Fed’s target, the job market has weakened, and we expect that the FOMC will continue to focus more on its full employment goal,” said Fratantoni.
Fratantoni added that the job market will likely weaken over the next year even without widespread layoffs. Meanwhile, the pace of hiring remains slow, and the unemployment rate is expected to increase from its current rate of 4.3% to 4.7% by mid-2026.
“We expect that home sales will increase in 2026. The combination of lower mortgage rates and flat home prices has helped affordability conditions improve. While mortgage rates are not expected to decline further, housing supply has increased in recent months, which will ease home-price growth and provide more housing options for prospective buyers,” Fratantoni added. “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.”
Fratantoni said that growing budget deficits and elevated inflation expectations will keep longer-term rates from falling further, even if the Fed cuts short-term rates. It will result in the 10-year Treasury yield above 4% and mortgage rates between 6% and 6.5% in 2026.
MBA expects there will be periods where rates drop, which will provide moments of refinance activity, similar to what has occurred several times in 2025.
Housing market developments will be location specific, Kan shared with the audience, noting that growing housing inventory in markets such as Florida, Colorado and Arizona have led to annual home-price declines. On the flip side, 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.
“While median principal and interest payments are gradually declining, they are significantly higher than they were five years ago, given cumulative home-price appreciation and the current level of mortgage rates. Borrowers have increasingly shifted to ARM and FHA loans to manage these affordability challenges. Additionally, the cost burdens from increasing taxes and homeowners’ insurance continue to pose challenges to both prospective homebuyers and existing homeowners,” Kan said.
Walsh noted that Q2 2025 saw the highest production profitability since 2021, ending a streak of 10 quarterly net production losses.
“Origination costs are still elevated and the pull-through of loan closings to applications has declined over the past four years,” said Walsh. “Many lenders are exploring ways to reduce origination costs and increase productivity through technology advances and process improvement. Other lenders may consider mergers or acquisitions to achieve scale.”
Walsh continued, “The servicing side of the business has been a bright spot over the past several years, generating income to counterbalance weak origination results and also offering recapture opportunities.”
According to Walsh, delinquency rates – particularly for government loans – are likely to increase as unemployment rises, putting pressure on servicing costs.
“U.S. homeowners have accumulated approximately $36 trillion in home equity, providing a financial cushion. This build-up in equity gives many borrowers options to resolve financial hardship — including loan workouts, cash-out refinances and home equity loans, or selling their homes to avoid foreclosure.”
MBA also released an updated forecast for commercial and multifamily originations: commercial real estate finance origination volume is expected to increase 24% and multifamily volume 16% in 2026, following solid growth for both in 2025.
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