In contrast to Freddie Mac which this week raised its outlook for residential originations from all lenders, Fannie Mae has scaled back its forecast.
In its Housing Forecast: April 2013, Fannie predicts that U.S. home-loan production will rise from $464 billion in the first quarter to $481 billion then settle back at $374 billion in the third quarter.
Last month, the Washington, D.C.-based company projected first-quarter volume would be $490 billion then drop to $469 billion in the second quarter and $380 billion in the third quarter.
A closer examination of the quarterly forecasts shows that the first-quarter refinance projection was cut to $353 billion from $373 billion, while the second-quarter outlook increased to $306 billion from $291 billion, and the third-quarter prediction fell to $201 billion from $205 billion.
Refinance share is expected to fall from 76 percent to 64 percent then drop to 54 percent in the third quarter.
Fannie also cut its first-quarter purchase financing outlook by $6 billion to $111 billion. The second-quarter forecast was reduced by $4 billion to $175 billion, and expected third-quarter purchase originations were trimmed $2 billion to $173 billion.
Adjustable-rate mortgages are expected to account for 5 percent of first half volume then increase to 7 percent in the third quarter. By the end of next year, ARM share is projected to double to 14 percent.
Fannie trimmed its full-year estimate of 2012 total originations to $1.924 trillion from the $1.925 trillion predicted in March..
This year’s forecast was cut to $1.627 trillion from $1.645 trillion, while expected 2014 originations were reduced to $1.125 trillion from $1.129 trillion.
Over at Freddie, however, this year’s forecast was lifted to $1.800 trillion from $1.750 trillion, and the 2014 outlook was raised to $1.300 trillion from $1.250 trillion.
Fannie’s outlook for 2013 refinances retreated to $1.014 trillion from $1.027 trillion, though the 2014 forecast inched up to $0.406 trillion from $0.405 trillion.
Refinances are expected to account for 62 percent of 2013 business and 36 percent of 2014 activity.
Purchase financing production is now expected to come in at $0.613 trillion this year versus the $0.619 trillion projected in the previous outlook. The 2014 purchase projection fell to $0.719 trillion from $0.725 trillion.
ARM share is forecasted to surge from 7 percent in 2013 to 12 percent next year.
Total residential loans outstanding are predicted to finish this year at $9.962 trillion and 2014 at $10.172 trillion.
The first-lien portion of mortgage outstanding is forecasted at $9.211 trillion for 2013 and $9.426 trillion for next year.
