In the fourth installment of October Research, LLC’s economic forecast series, Mortgage Bankers Association (MBA) Chief Economist and Senior Vice President of Research and Industry Technology Michael Fratantoni shared his views on mortgage rates, housing trends, and lenders performance and expectations.
“Twenty twenty-one was just an outstanding year of recovery, with almost five percent GDP growth,” Fratantoni said. “And this is coming off of what was in 2020 one of the sharpest recessions ever, but it was also one of the shortest recessions ever and the rebound really has been quite impressive, really a very different experience than we had coming out of the 2009 recession, the great financial crisis.”
Fratantoni said GDP growth for 2021 was less than what was initially forecasted. Earlier this year, the MBA expected GDP growth to be between 5.5 percent and 6 percent. However, because of supply chain issues across so much of the economy, it did not happen. As a result, the MBA expects some of that unrealized growth to actualize in the next year, and it is likely the economy will see GDP growth above four percent in 2022.
The webinar then turned to the unemployment rate and the improvement it will see over the next 12 months, what the Federal Reserve will do with interest rates next year and beyond, how the current economic situation is affecting household income and consumer spending, and the pandemic’s lasting effect on inflation.
“With inflation expectations going up and with inflation likely to stay persistently higher than many had thought earlier this year, this really is a recipe for at least some increase in rates,” Fratantoni said.
This 30-minute, complimentary webinar sponsored by SoftPro is now available for download.