The Mortgage Bankers Association (MBA) last week upped its 2004 forecast for loan originations to $2.5 trillion from $2 trillion previously. The MBA attributed the increase to continued low interest rates. The historical low rates are expected to result in a record high loan origination market for purchase loans and a refinance market that is surprisingly strong even compared to the record set last year.

MBA predicts that purchase home mortgages will comprise 54% of total originations, which is equivalent to $1.4 trillion. These numbers are up from the $1.3 trillion previously forecast. Refinancings are expected to comprise $1.1 trillion in originations, which is significantly more than the $0.7 trillion originally expected.

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