The Mortgage Bankers Association has revised its 2020 forecasts for mortgage activity as a result of last week’s drop in interest rates to a 30-year low.

The MBA now forecasts total mortgage originations to hit around $2.61 trillion nationwide in 2020, a 20.3 percent gain from the 2019 volume of $2.17 trillion. Refinance originations are expected to double earlier MBA projections, jumping 36.7 percent to around $1.23 trillion. Purchase originations are now forecasted to rise 8.3 percent to $1.38 trillion.

Refinance activity increased in 2019 due to the Federal Reserve’s series of cuts to the federal funds rate.

The MBA also reported that mortgage applications increased 55.4 percent from one week earlier, according to data from the MBA’s Weekly Mortgage Applications Survey for the week ending March 6.

The Market Composite Index, a measure of mortgage loan application volume, increased 55.4 percent on a seasonally adjusted basis from one week earlier to the highest level since April 2009. On an unadjusted basis, the Index increased 54 percent compared with the previous week.

The Refinance Index increased 79 percent from the previous week to the highest level since April 2009. It was 479 percent higher than the same week one year ago.

The seasonally adjusted Purchase Index increased 6 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and 12 percent compared to the same week one year ago.

Joel Kan, MBA’s Associate vice president of economic and industry forecasting, said in a statement that the 30-year fixed-rate mortgages rate fell to match its December 2012 survey low of 3.47 percent after market uncertainty around the coronavirus led U.S. Treasury bond rates to drop last week. Freddie Mac’s own weekly survey found that the average rate on 30-year fixed mortgages hit the lowest level since it began tracking the figure in 1971.

“Homeowners rushed in, with refinance applications jumping 79 percent – the largest weekly increase since November 2008,” Kan said. “With last week’s increase, the refinance index hit its highest level since April 2009. The purchase market also had a solid week, with activity nearly 12 percent higher than a year ago. Prospective buyers continue to be encouraged by improving housing inventory levels in some markets and very low rates.”

Kan said that the MBA took into account the current economic situation and falling rates when it nearly doubled its 2020 refinance originations forecast to $1.2 trillion, the strongest refinance volume since 2012.

“As lenders handle the wave in applications and manage capacity, mortgage rates will likely stabilize but remain low for now,” Kan said. “This in turn will support borrowers looking to refinance or purchase a home this spring.”

The refinance share of mortgage activity was 76.5 percent of total applications compared to 66.2 percent the previous week.