KEY POINTS
  • The average rate on the popular 30-year fixed loan will rise to 4%, according to the Mortgage Bankers Association's forecast.
  • Refinance originations will drop 62% in 2022 to $860 billion.
  • However, mortgage originations for the purpose of buying a home are forecast to rise 9% to a record of $1.73 trillion in 2022.
A worker carries lumber as he builds a new home in Petaluma, California.

Rising interest rates will result in a sharp drop in refinance demand in 2022, meaning a lot less business for mortgage bankers, according to the Mortgage Bankers Association's just-released annual forecast. It predicts total origination volume will drop 33% to $2.59 trillion.

The average rate on the popular 30-year fixed loan will rise to 4%, a full percentage point higher than it is now, MBA economists say.