MBA Forecasts a 5% Drop in 2027 Mortgage Originations as Rates Stay Above 7%

The Mortgage Bankers Association used the opening of its Annual Convention and Expo in Chicago on Sunday, Oct. 11, to release its 2027 outlook. MBA expects total single-family origination volume to fall 5% to just under $2 trillion next year, down from the $2.1 trillion it expects for 2026.

Why this matters: MBA now expects mortgage rates to stay above 7% through 2027. If that holds, refinance activity shrinks further and lenders compete harder for a purchase market that barely grows.

Cover: Editorial illustration for the MBA 2027 forecast. Illustration created for mortgage.news; it does not depict a real person, property, product screen or document.

The forecast in numbers

All figures below are MBA projections, not results:

• Total single-family originations: just under $2 trillion in 2027, down 5% from an expected $2.1 trillion in 2026.
• Purchase originations: up 0.8% to $1.42 trillion.
• Refinance originations: down 17% to $571 billion.
• Loan count: down 5.6% to 5.0 million loans, from an expected 5.3 million in 2026.
• 30-year mortgage rate: averaging 7.3% in the fourth quarter of 2026 and staying above 7% through 2027.
• 10-year Treasury yield: averaging 5.1% in the fourth quarter and staying close to 5% through 2027.

Why MBA sees rates staying high

Chief Economist Mike Fratantoni said mortgage rates recently reached their highest level in more than three years and 10-year Treasury rates their highest in 24 years. He pointed to inflation above the Federal Reserve's target and large government deficits. MBA expects two more quarter-point Fed rate hikes, one in December and one in the first quarter of 2027, and economic growth of 1.8% over the next year.

MBA said rates are likely to come down from their recent peaks, but on a higher path than it previously forecast. Fratantoni also said the uncertainty is substantial: recession risk is elevated, and a renewed spike in oil prices could push inflation higher.

What MBA said about borrowers and lenders

Deputy Chief Economist Joel Kan said the buyers still in the market are increasingly choosing adjustable-rate loans or paying points. The ARM share of applications averaged almost 10% over the past month, and MBA expects it to stay above 9% through 2027.

Marina Walsh, who leads MBA's industry analysis, said independent mortgage banks posted positive average production profits in the second quarter for the fifth straight quarter. Results were wide apart: the top 20% of 325 lenders averaged 122 basis points, while the bottom 20% averaged a loss of 76 basis points.

What to take from it

For borrowers: a forecast is not a quote. MBA's view suggests waiting for a big rate drop may not pay off on a fixed timeline, but individual rates depend on credit, loan type and the day you lock. Compare full Loan Estimates, including points and ARM terms, rather than headline rates.

For mortgage professionals: MBA's numbers point to a purchase-driven 2027 with fewer refinance opportunities. MBA's own profit data suggests that pricing, product mix and cost control may matter more than volume.

Monday, Oct. 12, is Columbus Day, and SIFMA recommends a full close of U.S. bond markets, so there is no live Treasury trading today to move these projections.