Mortgage originations are predicted to rise in 2021 to $1.8 trillion from 2020's projected $1.6 trillion.

Fannie Mae's Economic and Strategic Research Group provides commentary and predictions for the U.S. economy in 2021. The ESR group expects the U.S. economy to grow 5.3% in 2021, which is a substantial increase from the currently projected 2.7% contraction in 2020. The group cited the expansion of COVID-19 vaccination efforts and the approaching warm weather will help the U.S. economy pick up from the hits taken towards the end of 2020. According to the commentary, housing activity is expected to remain strong in 2021, however sector growth will likely decelerate from the torrid pace set in the second half of 2020. While the ESR Group expects home sales to rise 3.8% in 2021, the monthly pace is likely to slow through much of the year, according to the report. Home price appreciation is also expected to slow along a similar timeline. The group expects purchase mortgage originations to rise in 2021 to $1.8 trillion from 2020's projected $1.6 trillion. Refinance origination activity is forecast at $2.2 trillion in 2021, down from the projected all-time high of $2.8 trillion in 2020. "COVID-19 remains the dominant force altering the path of the economy through the behaviors of people, businesses and policymakers," said Doug Duncan, Fannie Mae senior vice president and chief economist. "Therefore, the best policy for economic recovery is the broad distribution of an effective vaccine, which is underway. The sooner this can be successfully accomplished the sooner growth can accelerate, and our thought is that by mid-year vaccine distribution efforts will be well-established, allowing for a strong second half."

Source: Mortgage Professional American