While banks continue to post solid earnings from mortgage activity, some industry analysts have expressed concern that the momentum won’t hold through 2013 and expect contraction in the second half of the year, HousingWire reported Jan. 22.

Recent profits from mortgage banking largely have been the result of robust activity in the refinancing market and higher home purchase volumes thanks to low interest rates, according to investment bank FBR Capital Markets, HousingWire reported. The bank said it expected mortgage banking profitability to remain strong through 2013 but not necessarily beyond.

JPMorgan Chase reported $51.2 billion in mortgage originations for the fourth quarter of 2012, HousingWire reported. That amount is a 33 percent increase from the same point a year earlier and an 8 percent increase from the third quarter of 2012. JPMorgan’s mortgage unit reported net income of $418 million, compared to a $269 million loss a year earlier.

U.S. Bancorp also has seen record revenue from the mortgage market. It reported $71.5 billion in new lending activity in the fourth quarter; mortgage banking now accounts for 20 percent of the bank’s fee revenue compared to 14 percent  a year earlier.

However, analysts with financial services firm Compass Point see refinancing burnout in the near future. “Wells Fargo, USB, Bank of America, JPMorgan Chase are all hiring mortgage personnel and that additional amount of capacity in the market will allow for a greater amount of originations, which is likely to cause pricing and mortgage rates to contract or the margins around mortgage rates to contract if interest rates stay where they are,” analysts told HousingWire.

HousingWire reported that gain-on-sales margins likely will tighten in the second quarter of 2013 and then will post substantial contraction later in the year.