Square Feet

The Mortgage Bankers Association today released a forecast in which the trade group’s chief economist predicts a down year in 2008 for mortgage originations, followed by another down year in 2009. And even though economist Doug Duncan also predicts that rates for 30-year mortgages (conforming ones that is, of $417,000 or less) will rise to only 6.2 percent by the fourth quarter of this year, he does not think that will result in much of a boost in refinance actiivty. Lending criteria are tighter, and home prices are on the slide, either or both of which can make it harder to refinance.

“Total mortgage production will be down 16 percent to $1.96 trillion this year from a projected $2.34 trillion in 2007,” the forecast says. “This would mark the first time since 2000 that total mortgage originations fall below $2 trillion.” And the forecast predicts another 4 percent drop in 2009, to a total of $1.88 trillion in purchase and refinance mortgages.

Those are some big nationwide numbers that are likely headed down. And now for some smaller, local numbers that moved down in December. This is from the “commentary” section of the January 2008 “market update” report prepared by San Jose broker Richard Calhoun, of Creekside Realty. The January report covers December data. Calhoun keeps daily tabs on multiple listing service data in Santa Clara County. An excerpt:

December 2007 had only 488 completed sales (closings) in SCC. That is the fewest of any month not only since 1998; but all the way back to 1984, when the MLS first started publishing statistics. Lower than September 2001, when the nation was stunned with 9/11. December 2007 is only 60% or less of any previous December, back to 1998 when we started gathering data.