Coronavirus worries have hit the world economy hard. U.S. stocks have plunged as supply chain and travel disruptions continue across the globe. However, some of the fallout is having a positive impact in an unlikely place: the mortgage industry. 

On Tuesday, the Mortgage Bankers Association, an industry trade group, said it now expects a 36.7% year-over-year gain in mortgage refinances in 2020. It's also projecting total mortgage originations to jump by 20.3% from 2019's levels; the group had been projecting an 8.3% decrease. That could benefit top U.S. mortgage lenders like Wells Fargo (WFC 1.03%) and JP MorganChase (JPM 1.40%).

A woman holding a small model house works on a calculator with charts underneath it.

Mortgage originations are now expected to rise in 2020, led by a boom in refinancing. Image source: Getty Images.

Historic lows

Mortgage rates have been trending lower since November 2018, when they peaked at 4.94%. Following an emergency Federal Reserve rate cut on Feb. 3 in response to coronavirus concerns, the benchmark 30-year fixed mortgage rate hit 3.29%. That's the lowest rate since recording began nearly 50 years ago.

News of the historically low rate caused refinance applications to surge by 224%, according to government mortgage lender Freddie Mac. Mortgage bankers have been scrambling to process the flood of new applications.

While mortgage rates don't directly track the Fed's benchmark interest rates, they often move in tandem. With the Fed expected to announce further rate cuts later this year because of the coronavirus' impact on the economy, mortgage rates may fall even further, leading to even more applications for refinancing.

A housing boom

The Mortgage Bankers Association also had good news for residential homebuilders like D.R. Horton (DHI 0.78%) and NVR (NVR -0.08%), which have their own mortgage banking arms. Overall purchase originations -- which include new home purchases -- are expected to rise 8.3% in 2020, to $1.38 trillion. That's a 4.5% increase over the group's prior forecast of $1.32 trillion.