Single-family mortgage volume could reach $2.2T in 2026 as lower rates, stable prices and growing inventory fuel more home sales and refinances, the MBA said.

LAS VEGAS — The Mortgage Bankers Association (MBA) announced at its 2025 Annual Convention and Expo that total single-family mortgage origination volume is expected to increase to $2.2 trillion in 2026 from $2.0 trillion expected in 2025.

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.

MBA's 2026 outlook was presented by 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.

According to Fratantoni, the U.S. economy will grow at a below-trend rate over the next year, as the economy faces headwinds from 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.

He added that the job market will likely weaken over the next year. Even though there have been no widespread layoffs, 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.

Fratantoni expects inflation to be stubborn, as tariffs on imported goods will eventually be passed on to consumers in the form of higher prices.

"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. 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."

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. This will keep the 10-year Treasury yield above 4% and mortgage rates between 6 and 6.5%. 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.

Kan emphasized that housing market developments are location specific, as 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.

"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 during her presentation that production profitability in the second quarter of 2025 was the highest since 2021, a welcome development after ten quarters of net production losses over that same time period.

"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. 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.

CREF origination volume is expected to increase 24% and multifamily volume 16% in 2026 following solid growth for both in 2025.

"The CRE lending market has remained strong with new originations increasing year-over-year during the first six months of 2025, said Judie Ricks, MBA's AVP of CREF Research. "The multifamily market experienced similar strength in the first half of the year that is expected to continue into 2026. Notably, agency loans accounted for more than 40% of multifamily originations in 2024."

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