Bank of America projects 2027 mortgage volume at $1.72 trillion

Bank of America projects 2027 US mortgage originations at $1.72 trillion, with just $344 billion coming from refinances, according to a report released Friday by HousingWire. The bank’s analysts said their outlook is slightly lower than other industry forecasts because they expect weaker housing market conditions and home sales, along with higher year-end rates. Their 2027 forecast assumes a 10-year Treasury yield average of 5.25%, a 2.5% drop in existing home sales, a 0.5% increase in new home sales, and a 1% rise in full-year home price appreciation. BofA frames 2027 as a replay of 2023 in several key respects, including elevated mortgage rates, subdued housing activity, and a persistent lock-in effect. But the analysts argue that 2027 could be even more challenging than 2023 because several demand-supportive forces have faded. In 2023, many buyers still believed higher mortgage rates were temporary and leaned on a buy now, refinance later strategy. By 2027, rates will have been elevated for nearly five years, and the Federal Reserve will have resumed tightening, eroding confidence in meaningful refinance opportunities. At the same time, home price appreciation has cooled while homeownership looks more like a high-carry, lower-return investment. For your business and real estate plans, higher rates and stubborn costs mean buyers will keep facing strict affordability walls as taxes, insurance, and maintenance keep climbing. When the biggest Bank on the block tells you the mortgage machine is stuck in low gear, take a hard look at your cash flow before you buy the next piece of inventory.