Fannie Lifts Refi Outlook

Overall residential originations at primary lenders, including purchases and refinances, are expected to fall from $507 billion in the second quarter to $435 billion in the current period , the secondary lender predicted in its Housing Forecast: August 2013. A further decline to $301 billion is expected in the final three months of 2013.

In its July outlook, Fannie had mortgage production dropping from $566 billion to $359 billion this quarter and $261 billion in the fourth quarter.

Refinances are expected to fall from $333 billion to $257 billion during the third quarter and $138 billion in the fourth quarter versus Fannie’s prior projections that volume would go from $384 billion to $189 billion then close out the year at $103 billion.

Fannie’s outlook is for purchase financing to rise from $174 billion to $178 billion this quarter then recede to $163 billion. Last month’s forecast had purchase production dropping from $183 billion to $170 billion in the third quarter and $158 billion in the fourth quarter.

The full-year 2013 origination outlook increased to $1.746 trillion from $1.647 trillion in the previous report, while next year’s forecast improved to $1.085 trillion from $1.071 trillion.

The refinance portion of this year’s projection is $1.123 trillion, up from $1.028 trillion expected in the last outlook. The 2014 refinance outlook was raised to $0.345 trillion from $0.331 trillion.

Fannie has 2013 refinance share at 64 percent and next year’s refinance share at just 32 percent.

Expected purchase production for this year inched up to $0.623 trillion from $0.619 trillion, while the 2014 forecast slipped to $0.740 trillion from $0.741 trillion.

The Washington, D.C.-based company forecasts that adjustable-rate mortgages will account for 7 percent of total 2013 applications and 11 percent of next year’s activity.

Estimated residential loans outstanding are expected to climb from $10.032 trillion this year to $10.244 trillion in 2014.