‘We’ve seen a minor easing in closed transactions of existing-home sales, and a slight increase in the leading indicator of pending sales based on contracts’, said its chief eceonomist David Lereah. ‘New home sales and housing starts have been fluctuating, so the overall market is stabilising.

’On one hand is the rise in mortgage interest rates that has slowed sales in many higher cost markets, and on the other is 3.8m new jobs over the last two years. This means many potential home buyers could enter the market in the foreseeable future, especially in moderately priced areas where affordability conditions remain favourable. In fact, this is already occurring’.

Although sales will be fairly steady over the balance of the year, declines since last fall mean annual totals will be lower, said NAR. Existing home sales are forecast to fall 6.5 per cent to 6.6m this year, the third highest on record after 2005 and 2004. New home sales are projected to drop 12.8 per cent to 1.1m, also the third best on record. Housing starts should be down 9.1 per cent to 1.9m.

Although the 30 year fixed mortgage rate is running nearly a percentage point higher than a year ago, the national median existing home price for all housing types is forecast to climb 4.3 per cent this year to £121,000, while the median new home price is expected to rise only 0.5 per cent to £127,800 as builders offer incentives to clear unsold inventory.

• Increasingly exotic mortgage offerings are likely in the US, a forward looking report from the Mortgage Bankers Association. This is because larger players are likely to gain competitive advantage by putting together complicated financial products. And while the industry will become increasingly consolidated, real estate finance processes will be broken down into a series of smaller component pieces that can be isolated, optimised, automated and outsourced, said the report.

Meanwhile ‘the holy grail of the large integrated financial services companies’ will be the capability to cross sell a variety of financial products to existing customers, with the mortgage as a key product.

Borrowers increasingly will view their mortgage as one of a number of financial products they consume, suggested MBA. But ‘because borrowers and investors have access to a growing array of firms and products - and are more willing than ever to choose innovative products and companies that match their needs - the concept of "owning the customer" is and will be a faulty premise’.

The shifting mix of borrowers will also drive change in the real estate finance industry. Changing demographics include patterns of regional migration, an increasing share of borrowers who are recent immigrants, and a large cohort of boomers and older seniors will all act to change the demand for different types of single family, multifamily, and commercial properties and, as a result, will change the demand for residential and commercial lending. ‘These borrowers will force the industry to adjust its products, processes, channels and workforce’.