This year’s home loan production is expected to tumble by more than one third from last year, according to a new forecast. At the same time, refinance share is projected to sink.
Fourth-quarter 2009 residential originations are projected to come in at $558 billion, the Mortgage Bankers Association reported in an economic forecast released today. The projection is higher than the $519 billion closed in the third quarter.
One- to four-unit production is projected to tumble to $312 billion during the current quarter, then increase to $379 billion in the second quarter.
During all of 2009, home loan originations were estimated at $2.113 trillion, jumping from $1.509 trillion in 2008.
This year’s activity is estimated at just $1.278 trillion — a decline from the $1.556 trillion estimated in October 2009 by the trade group.
Refinances are projected to account for nearly two-thirds of 2009 business, jumping from just over half a year earlier. During 2010, refinances are expected to account for less than 40 percent of all activity.
For just the first quarter, refinance share is expected to fall to 53 percent from 65 percent in the prior period. In MBA’s most recent Weekly Mortgage Applications Survey, refinances accounted for 68 percent of applications.
