Demand for mortgages in the United States skyrocketed over the past two years due to low-interest rates that have made them attractive to consumers. After remaining low for some time, mortgage rates have been on the rise since the beginning of 2022, reaching their highest levels since the early days of the pandemic, with the average rate on 30-year mortgages hitting 3.9% last week. Rates are reacting to anticipated tightening monetary policy and interest-rate hikes this year.
Although a rise in rates will affect refinance activity, the mortgage industry is likely to continue to see significant demand from the purchase market. According to a report from the Mortgage Bankers Association, the industry is expected to originate more than $2.50 trillion for each of the coming three years (2022 - 2024), which is at least 40% higher than average annual originations between 2010 and 2019.
