""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.
[IMAGE]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.
[COLUMN_BREAK]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.""