Mortgage banking economists are less optimistic about this year’s expected mortgage originations than economists for the Federal National Mortgage Association or the Federal Home Loan Mortgage Corp. Mortgage bankers scaled back on their projections for purchase financing, while next year’s refinances are expected to fall by more than half.
In its Housing Forecast: July 2012, Fannie Mae predicted that 2012 residential originations will total $1.486 trillion.
Freddie Mac was even more optimistic, projecting in its July 2012 Economic and Housing Market Outlook that this year’s production will reach $1.650 trillion.
But the Mortgage Bankers Association was more conservative in its Mortgage Finance Forecast this month. The Washington, D.C.-based trade group forecasts that 2012 originations by all U.S. residential lenders will total just $1.320 trillion.
Still, that’s more than the $1.294 trillion projected last month.
MBA’s latest forecast has total home-loan production retreating next year to $1.041 trillion.
Refinance originations are expected to sink from $932 billion this year to $403 billion in 2013 versus last month’s prediction from MBA that refinances would go from $894 billion to $370 billion.
But the outlook for purchase financing was cut to $388 billion this year and $638 billion next year from last month’s expectation that purchases would climb from $400 billion to $698 billion.
On a quarterly basis, MBA raised its overall third-quarter forecast to $324 billion from $321 billion, while the fourth-quarter outlook was lifted to $261 billion from $238 billion.
Refinance share is expected to fall from 74 percent in the second quarter to 71 percent this quarter and 59 percent in the final three months of 2012. Last month MBA had refinance share at 68 percent this quarter and 54 percent in the fourth quarter.
The third-quarter purchase financing forecast was cut to $94 billion from $103 billion, while the fourth-quarter purchase outlook was lowered to $107 billion from $109 billion.
