A new report from a market research outfit has this year’s residential originations coming in between $300 billion and $400 billion less than projected by the industry. The company making the prediction claims the mortgage industry is being too optimistic.
The latest forecast has total mortgage volume ranging from 5.62 million to 6.19 million loans for between $1.03 trillion and $1.14 trillion.
That projection was released today by iEmergent.
The Des Moines, Iowa-based company expects refinances to account for 2.70 million to 3.27 million loans for between $0.504 trillion and $0.610 trillion.
Purchase volume is forecast at 2.91 million units for $0.528 trillion, according to the market-research firm. In the best-case scenario, purchase originations will reach $0.530 trillion.
iEmergent pared its projection for both purchases and refinances by 5 percent from its first-quarter forecast.
In Fannie Mae’s June housing forecast, 2010 originations were expected to come in at $1.367 trillion, including $0.698 trillion in purchase transactions and $0.669 trillion in refinances.
Freddie Mac’s latest outlook has this year’s production at $1.550 trillion, including roughly $0.635 trillion in purchase-money mortgages and $0.915 trillion in refinances.
“The second half of this year looks to be a continued struggle … for the home financing industry,” iEmergent Founder and President Dennis Hedlund said in the statement. “The mortgage industry’s fixation on what seems to be positive supply-side conditions — low rates, subsidies, affordability, high inventories, soft home prices and a big, willing investor like the U.S. government — is beside the point.
“There are not enough positives to fuel a big upswing in the housing market, because the demand-side — U.S. households and homeowners — remain stuck in big negatives.”
