Higher home financing costs won't derail the housing market this year, the country's top mortgage industry economist says. Home purchase loans are forecast to rise about 10 percent this year. The increase will come from a combination of more purchases and higher prices. "We are forecasting about a 10 percent growth in single-family housing starts for 2017 and a little bit less than that for 2018," said Lynn Fisher, vice president of the Mortgage Bankers Association. Along with mortgage costs, home prices will rise this year. "We are still expecting fairly strong house price growth this year — about 4.8 percent," Fisher said. "That should start slowing down a little bit as new housing starts pick up momentum." Of course, all those forecasts assume that mortgage rates won't get out of hand. Still, the Mortgage Bankers Association's outlook is for modest mortgage rate increases. Fixed mortgage rates are averaging 4.15 percent. "By the time we get to the fourth quarter of this year, we will still be under 5 percent — we are thinking 4.7 percent," Fisher said. "Something north of 5 percent by the time we get to 2018, and by the time we get to 2019, we show fourth-quarter rates hitting 5.5 percent.
- Dallas Morning News, February 16, 2017