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iEmergent Forecasts Drop in Mortgage Volume upon Weakening Market

""iEmergent"":http://www.iemergent.com, a Des Moines, Iowa-based market research and advisory firm for the mortgage and real estate industries, has issued a second-quarter update to its 2010-2014 Mortgage Volume Forecast.


The update reflects a 5.2 percent drop in both purchase and refinance volume dollars from the Q1 forecast that the company issued in January.

The iEmergent forecast projects that total purchase volume will not exceed $530 billion by the end of 2010.

The company's assumptions are based on a number of precarious market conditions, including the increasing wariness of consumers, the shift forward in normal purchase seasonality as a result of tax credit subsidies, and a decrease in average loan sizes.


iEmergent also expects mortgage interest rates to rise to the mid-five percent range by the end of the year, and home prices to fall an additional 3 to 6 percent.

These factors only augment the challenges facing the housing finance industry as the current pool of available households that are qualified, able and willing to finance a home continues to shrink, the company said.

Refinance volume, too, will remain muted, according to iEmergent â€" between $503 billion and $609 billion for the year.

""The second half of this year looks to be a continued struggle for U.S. households,"" said Dennis Hedlund, president and founder of iEmergent, ""and by default--no pun intended--for the home financing industry.""

Hedlund continued, ""There are not enough positives to fuel a big upswing in the housing market, because the demand-side â€" U.S. households and homeowners â€" remain stuck in big negatives. Job anxieties, extended under- and unemployment, the existence of too much debt, no savings, tougher credit, foreclosures, and mistrust of banks are just a few of the negatives that will smother consumer confidence for the rest of the year and likely into 2011.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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