MBA and Fannie Mae cut mortgage lending forecasts, but both still see home-purchase loans growing in 2027

The Mortgage Bankers Association and Fannie Mae have both trimmed their mortgage lending forecasts as rates climb back toward 7%, HousingWire reported on Tuesday. The MBA's September forecast, dated September 16, puts 2027 single-family originations at $2.101 trillion, down from $2.144 trillion in its August forecast and below the $2.123 trillion it expects for 2026. Fannie Mae's September housing forecast lowered 2026 to $2.121 trillion and 2027 to $2.279 trillion, according to HousingWire.

"Housing and mortgage activity slowed abruptly as mortgage rates moved higher over the past several weeks," MBA chief economist Mike Fratantoni said, adding that the group now forecasts two more Fed hikes over the next year.

The cut is in refinancing, not home buying

A shrinking mortgage market sounds like fewer people buying homes. The MBA's own tables say otherwise. Breaking its forecast into the two kinds of loans:

So the MBA still expects more purchase loans next year, not fewer. What disappears is refinancing, which had a strong first half of 2026 when rates dipped to about 6.1%. The MBA sees existing-home sales rising from 4.11 million this year to 4.24 million in 2027, with prices roughly flat: its median existing-home price slips from $424,000 to $418,000, and it expects the FHFA purchase-only index to rise just 0.5% over the year to late 2027.

Fannie Mae's table shows the same purchase picture, with purchase lending rising from $1.426 trillion to $1.477 trillion. The two part ways on refinancing. Fannie still pencils in refinance volume climbing about 15% in 2027, to $802 billion, while the MBA has it falling. That gap is the single biggest reason Fannie's 2027 total is about $178 billion higher than the MBA's.

Both forecasts already look optimistic on rates

Neither forecast is built on today's rates. Fannie Mae's note says its interest-rate assumptions use rates as of August 31, and it has the 30-year fixed averaging 6.7% in the third quarter and 6.8% in the fourth. The MBA has 6.7% and 6.8% for the same quarters and 6.7% to 6.8% through 2027. Freddie Mac's weekly survey hit 6.95% on September 17, up from 6.66% on August 27, and HousingWire's daily average for 30-year conforming loans was 7.32% on Tuesday.

In money, the gap between the forecast and the survey is not trivial. On a $400,000, 30-year loan, the monthly principal and interest is about $2,581 at 6.7% and about $2,648 at 6.95%, a difference of roughly $67 a month. If rates stay where they are, the refinance numbers in particular are likely to be revised down again, and Fannie's refinance rebound becomes harder to reach.

Who it hits

The businesses most exposed are the ones paid per closing: mortgage brokers, loan officers on commission, title and escrow offices, appraisers and closing attorneys. A refinance-heavy shop feels the MBA's 9% drop directly, while a purchase-focused one is looking at a slightly bigger market next year. Large lenders are flagging it too; HousingWire noted that Pennymac has indicated higher rates will weigh on its closed loan volume.

For someone buying a home this fall, the forecasts point to a market that is getting a little busier on sales volume, with prices that are not expected to move much. The rate is what will decide the monthly payment. That rate follows the 10-year Treasury, which the MBA expects to average 4.8% in the fourth quarter; it closed at 4.96% on Monday on Treasury's curve. Track it on our 10-year Treasury chart, and see our coverage of last week's jump to 6.95% and Tuesday's 2-year auction.

Sources: Mortgage Bankers Association; Fannie Mae Economic and Strategic Research; Freddie Mac; HousingWire; U.S. Treasury. Percentage changes calculated by The Company Chronicle. This is market information, not investment advice.