The estimate of last year’s home loan originations has been raised, while expectations for 2014 and 2015 production also increased. Mortgage outstanding are no longer expected to reach $10 trillion this year.
Residential loan originations are expected to fall from $308 billion during the final three months of last year to $284 billion in the first three months of this year then jump to $361 billion during the second quarter.
Last month’s forecast had U.S. production going from $303 billion to $276 billion in the first quarter then bouncing to $350 billion in the following three-month period.
The latest prediction was made in Fannie Mae’s Housing Forecast: February 2014.
Fannie projects purchase production will fall from $158 billion in the fourth-quarter 2013 to $141 billion in the current quarter then climb to $224 billion. The purchase financing outlook improved from the prior forecast, when volume was expected to go from $160 billion to $145 billion then climb to $223 billion.
Refinances are now expected to fall from $150 billion to $142 billion then retreat further to $137 billion in the second quarter of this year. Fannie lifted its refinance projection from $142 billion in the fourth-quarter 2013, $131 billion in the current quarter and $127 billion in the second quarter.
Fannie revised up its full-year 2013 estimate of overall originations to $1.823 trillion from $1.817 trillion. This year’s mortgage production is expected to be $1.278 trillion versus the $1.255 trillion predicted in the last forecast, while the 2015 projection increased to $1.176 trillion from $1.145 trillion.
Last year’s estimate of purchase financing slipped to $0.686 trillion from $0.688 trillion estimated in January, but the 2014 purchase forecast inched up to $0.787 trillion from $0.786 trillion. Next year’s purchase originations are predicted to land at $0.850 trillion compared to the $0.845 trillion forecasted last month.
On the refinance side, Fannie increased its 2013 estimate to $1.137 trillion from $1.129 trillion. This year’s projection grew to $0.491 trillion from $0.469 trillion, and the 2014 refinance forecast increased to $0.326 trillion from just $0.300 trillion projected in January by the Washington, D.C.-based company.
Expected refinance share is 38 percent for 2014 and 28 percent for next year.
Fannie puts the current year’s adjustable-rate mortgage share at 11 percent, while next year’s ARM share is expected to be 16 percent.
Mortgages outstanding reached an estimated $9.869 in 2013, more than the $9.865 trillion estimated last month, according to the secondary lender. But Fannie lowered expected outstandings to $9.925 trillion for this year from the $10.035 trillion projected last month, while next year’s forecast of outstandings was reduced to $10.081 trillion from $10.254 trillion.
First mortgages accounted for $9.158 trillion of the 2013 total, $9.230 trillion of the 2014 total and $9.382 trillion of next year’s outstandings.
