The Mortgage Bankers Association expects U.S. single-family mortgage originations to fall 5% in 2027 to just under $2 trillion, as persistently high borrowing costs weaken refinancing demand despite modest growth in home-purchase lending.
The outlook, announced October 11 at MBA’s annual convention in Chicago, compares with approximately $2.1 trillion in originations projected for 2026. The association expects refinancing volume to drop 17% to $571 billion next year, while purchase originations rise 0.8% to $1.42 trillion.
The distinction suggests that the anticipated contraction will be concentrated in refinancing rather than an equivalent decline across all mortgage lending. According to the MBA mortgage forecast, the number of loans originated is expected to decline from approximately 5.3 million in 2026 to 5 million in 2027, a 5.6% reduction.
Refinancing Drives Projected Lending Decline
2027 Mortgage Originations Forecast
Projected U.S. single-family mortgage lending volume
Source: MBA mortgage forecast, October 11, 2026. Figures are projections, not actual originations. Bar lengths are scaled to the larger category.
The forecast implies that purchase lending will represent about 71% of dollar-denominated mortgage originations next year, with refinancing accounting for the remaining 29%.
That concentration matters because refinancing depends heavily on whether existing homeowners can obtain a meaningful borrowing-cost advantage. When current mortgage rates are higher than rates homeowners already hold, the financial incentive to refinance generally diminishes.
An Investozora calculation using MBA’s rounded projections shows the composition of the market:
Mortgage Origination Share
Investozora calculation based on MBA’s 2027 projections
Total projected volume: $1.991 trillion. Shares are calculated from rounded purchase and refinancing projections, rather than separately published MBA percentages.
Source: MBA mortgage forecast, October 11, 2026. Calculations by Investozora.
The revised outlook also highlights a change from last year’s expectations. In October 2025, MBA projected $2.2 trillion in 2026 originations. Its latest estimate is approximately $2.1 trillion, about $100 billion lower on the rounded figures.
Mortgage Rates Remain Above 7%
MBA expects the average 30-year mortgage rate to reach 7.3% in the fourth quarter of 2026 and remain above 7% throughout 2027. It also projects the 10-year Treasury yield to average 5.1% in the final quarter of 2026 and remain close to 5% next year.
Those expectations follow a recent increase in observed mortgage costs. Freddie Mac reported an average 30-year fixed mortgage rate of 7.40% on October 8, up from 7.28% a week earlier, according to its mortgage rate archive.
MBA Chief Economist Mike Fratantoni expects mortgage and Treasury rates to decline from recent peaks while remaining higher than previously anticipated.
The association also assumes two additional quarter-percentage-point Federal Reserve rate increases, one in December 2026 and another in early 2027. Those are MBA projections, not scheduled policy outcomes. For borrowers seeking more context, Investozora has previously examined the mortgage rate impact of Federal Reserve policy.
Recent Housing Data Show Pressure
Recent lending figures support MBA’s assessment of weaker near-term demand.
Its weekly mortgage survey found that total applications fell 4.2% during the week ending October 2. Refinancing applications declined 8% from the previous week and 56% from a year earlier, while seasonally adjusted purchase applications slipped 2%.
Government housing figures provide another perspective. The U.S. Census Bureau reported that August new single-family home sales ran at a seasonally adjusted annual pace of 684,000, with an estimated 8.5 months of supply. Its new home report also placed the median sales price at $393,700.
New-home sales and mortgage originations measure different activities, but both help illustrate the conditions confronting the housing market. MBA expects national home-price growth to slow further in 2027 as construction softens and home sales remain relatively flat.
Mortgage Lenders Face Uneven Profits
The projected lending decline also carries implications for mortgage companies, particularly those dependent on refinancing revenue. MBA said the top-performing 20% of a sample of 325 lenders earned an average of $4,551 per originated loan in the second quarter of 2026, while the bottom-performing 20% lost an average of $2,551 per loan.
The difference suggests that lender profitability will depend not only on overall mortgage demand but also on operating costs, pricing, product mix and loan-servicing income.
MBA cautioned that financial-market shocks, inflation and geopolitical developments could alter its economic outlook. The forecasts therefore describe a possible path for mortgage lending, not a confirmed outcome.
The next major government housing releases include September housing construction data on October 20 and new-home sales figures on October 27, according to the Census release calendar. Those reports will provide additional evidence about housing activity, although they will not directly determine mortgage origination totals.
