Thanks to a turbo-charged refinance outlook, the projected volume of residential loan originations by lenders next year was lifted by more than $200 billion. Expectations for next year’s government mortgage business were also increased. But this year’s refinance forecast was trimmed.
Home-loan production by all U.S. lenders is projected to be $450 billion during the third quarter, rising from $430 billion estimated for the second quarter. But by the fourth quarter, volume is expected to sink to $360 billion.
Last month’s outlook had second-quarter originations totaling $420 billion. There were no changes to second-half forecasts. But the estimate for fourth-quarter 2011 originations was raised to $445 billion from $420 billion projected in July, while the first-quarter 2012 estimate was cut to $410 billion from $420 billion.
Freddie Mac’s third-quarter refinance forecast was reduced to $324 billion from $333 billion. But the expectation for third-quarter purchase financing was increased to $126 billion from $117 billion.
Full-year residential originations are expected to sink from $1.650 trillion in 2012 to $1.300 trillion in 2013. Last month’s forecast had overall production falling from $1.650 trillion to $1.070 trillion — a nice boost to next year’s forecast.
The secondary lender now expects refinance originations to fall from $1.205 trillion this year to $0.806 trillion in 2013. Last month, the McLean, Va.-based company had refinance business dropping from $1.221 trillion to $0.589 trillion.
Refinance share is expected to fall from 73 percent in 2012 to 62 percent next year.
The outlook for purchase financing was raised to $446 billion in 2012 from last month’s projection of $429 billion. Next year’s purchase forecast was also increased, to $494 billion from $482 billion.
Freddie’s expectations for government originations this year are $375 billion, the same as predicted last month. But next year’s outlook for government production was increased to $300 billion from $246 billion. Government share is now pegged at 22.73 percent for 2012 and 23.08 percent for 2013.
