Market Outlook: Growth Seen at 2.5% in 2025
The Mortgage Bankers Association is projecting solid U.S. growth in 2025, with real gross domestic product rising about 2.5% for the year. The forecast, delivered this week at the association’s Servicing Solutions Conference, points to a year of steady momentum that may cool a bit in the fourth quarter but finish positive.
“We’re starting from a solid baseline, with real U.S. growth near 2.5% in 2025,” said Joel Kan, MBA’s vice president and deputy chief economist. “That pace keeps the economy on a constructive path, even as late-year momentum softens.”
In Kan’s view, the economy is being carried by a consumer still willing to spend, supported by a Job market that hasn’t cracked but has cooled. The MBA highlighted that consumption remains the primary growth driver into 2026, with much of that activity anchored in households holding more liquid assets, cash, and accumulated wealth.
mba: economic growth steady Narrative Persists
During the briefing, MBA officials framed the current environment as favorable for growth but uneven across households. “The mba: economic growth steady posture for 2025 rests on a resilient consumer and a labor market that hasn’t loosened sharply,” Kan noted. “There are pockets of stress in lower-income segments, and that may show up in credit behavior before it affects the broader economy.”
Marina Walsh, MBA’s deputy chief economist, emphasized that spending patterns across households with differing balance sheets create divergent trajectories. “Consumption remains the engine of growth, even as some segments tighten,” she said, adding that the mix of cash, equity, and wealth across families matters for how far spending can extend into 2026.
Credit, Debt,and Delinquencies: Early Signs of Strain
The MBA’s briefing highlighted a broad debt backdrop stretching across households. Data from the Federal Reserve Bank of New York show student loan and auto loan balances at record levels, while credit card balances have climbed to roughly $1.2 trillion. Delinquencies, particularly on credit cards, have risen, a development that could ripple through other loan classes if stress concentrates in consumer wallets.
“Consumers are driving a good deal of the growth, but we’re starting to see cracks in some corners of the economy,” Kan said. “If those cracks widen, the housing and mortgage segments could feel the pressure sooner rather than later.”
Labor Market: Slower Hiring, Ongoing Resilience
The labor market is cooling, though the backdrop remains comparatively healthy by historical standards. MBA researchers project about 15,000 net jobs per month in 2025, a sharp deceleration from roughly 120,000 a month in 2024. The unemployment rate is hovering near 4.3%, while broader underemployment remains a concern for some workers who struggle to match skills with available roles.
Walsh noted that roughly a quarter of unemployed workers have been out of work for more than six months, complicating their ability to keep up with mortgage payments and other obligations. This dynamic could influence mortgage performance in specific borrower segments over the year.
FHA Delinquencies Rise: A Watchful Moment for Housing
A focal point of the conference was a rise in delinquencies among FHA borrowers. MBA researchers indicated that FHA loan delinquencies have ticked higher in the latest data cycle, signaling stress among lower-income homeowners and potential pressures on servicing networks. The FHA delinquency rate moved into a higher range for the year, underscoring that policy and program design will need to adapt if these trends persist.
Analysts say the uptick in FHA delinquencies could test servicing capacity and capital cushions, especially as interest rates stabilize at elevated levels. Lenders and servicers are weighing adjustments to underwriting standards and loss-mmitigation options as the year unfolds.
What This Means for Borrowers and Lenders
- Mortgage markets face a mixed backdrop: healthy overall growth with pockets of stress in lower-income segments.
- FHA delinquencies rising may prompt tighter credit decisions or more aggressive loss-mitigation strategies from lenders.
- Consumers’ appetite for debt remains strong in some cohorts, but rising balances across student loans, auto loans, and credit cards could curb spending if conditions worsen.
The mba: economic growth steady view hinges on a delicate balance: continued consumer resilience, a job market that doesn’t deteriorate abruptly, and effective risk management by lenders facing higher delinquency pressures in specific loan pools.
Key Data to Watch in 2025
- Real GDP growth: ~2.5% for 2025
- Unemployment: around 4.3%
- Job growth: ~15,000 net jobs per month in 2025
- Credit card balances: about $1.2 trillion
- Student loan and auto loan balances: at record highs
- FHA delinquencies: rising, with the rate in the higher range for the year
For policymakers and market participants, the big question remains whether the mba: economic growth steady narrative can withstand further stress in lower-income sectors or if a sharper slowdown emerges in the second half of 2025. The answer may hinge on consumer balance sheets, wage trends, and the effectiveness of mortgage-risk management in the FHA space. As lenders adjust to the evolving risk landscape, the housing market will remain a key barometer of how well the economy can sustain steady expansion in an uneven environment.
“The mba: economic growth steady scenario may hinge on a blend of solid consumer demand and prudent risk controls in lending,” Kan concluded. “If that balance holds, 2025 can deliver a return to a more normalized housing market and continued, if modest, growth across the economy.”
Discussion