Mortgage bankers have next year’s residential originations coming in more than $300 billion less than the latest projection from the Federal Home Loan Mortgage Corp. The most recent outlook from the Federal National Mortgage Association falls somewhere in between.
One- to four-family originations were $428 billion during the second quarter, according to an estimate released by the Mortgage Bankers Association. Volume was stronger than $356 billion estimated for the first quarter.
But the trade group doesn’t see any improvements ahead — with production projected to plummet from $403 billion in the third quarter to $262 billion by the fourth quarter and mostly hanging below $300 billion through the beginning of 2012.
Refinances represented 58 percent of second-quarter activity, falling from nearly two-thirds in the previous period. The share in the third quarter was estimated at 71 percent then projected to fall to 55 percent by the final period of this year.
The share of borrowers opting for adjustable-rate mortgages was 5 percent during the entire first half of this year and is projected to come in at 6 percent during the second half.
Annual originations during 2010 are expected to reach $1.449 trillion, tumbling from $2.102 trillion last year. Next year’s residential production is expected to fall to $1.060 trillion.
Freddie Mac previously reported that it expects annual production by U.S. originators to reach $1.400 trillion this year and during 2011. Fannie Mae’s forecast has 2010 originations at $1.499 trillion, while next year’s projection is $1.215 trillion.
MBA projects in its forecast that the 30-year fixed-rate mortgage will be 4.8 percent in the fourth quarter, then increase to 4.9 percent in the first-quarter 2011. The one-year ARM will rise from 4.5 percent to 4.7 percent during the same period.
