KBW Expects Mortgage Industry To Be Weaker Next Year

KBW said that it expects the mortgage industry to have a weaker year in 2011 relative to 2010.

“In 2010, the industry benefited from improving mortgage credit, strong mortgage-backed securities prices, a relatively steep yield curve, and strong refinance origination volumes,” KBW writes.

“While the sector should continue to benefit from stable credit trends and low rates in 2011, net interest margins are likely to contract and mortgage volumes should decline meaningfully.”