Economists at the Federal Home Loan Mortgage Corp. have raised the outlook for refinances and lowered expected purchase financing for this year — dragging down the overall forecast.
During the first-three months of this year, Freddie Mac predicts that industry-wide single-family loan originations will amount to $325 billion.
U.S. mortgage lending
is then expected to jump to $460 billion in the second quarter and climb to $495 billion during the following three-month period.
The secondary lender made the predictions in its March 2018 Economic & Housing Market Forecast.
In last month’s outlook, Freddie had home lending climbing from $335 billion in the first quarter to $495 billion three months later and $500 billion in the third quarter.
Based on projected refinance share, Mortgage Daily estimates that refinance originations will fall from $114 billion this quarter to $110 billion in the second quarter. February’s outlook had refinances climbing from $101 billion to $124 billion.
First-quarter purchase financing is expected to be $211 billion, less than $235 billion previously predicted. Second-quarter purchase-money lending is projected to leap to $350 billion, less than $371 billion in the last outlook.
Overall full-year originations are expected to rise from $1.72 trillion in 2018 to $1.76 trillion next year. This year’s forecast was trimmed from $1.74 trillion, while the 2019 outlook fell from $1.78 trillion.
Freddie increased the 2018 refinance forecast to $0.447 trillion from $0.435 trillion, while next year’s outlook was reduced to $0.405 trillion from $0.409 trillion.
Refinance share is predicted to thin from 26 percent this year to 23 percent in 2019.
Expected purchase-money lending this year was lowered to $1.27 trillion from $1.31 trillion in the February forecast, while
the 2019 outlook fell to $1.355 trillion from $1.371 trillion.
Based on Freddie’s expected originations of loans insured by the Federal Housing Administration and guaranteed by the Department of Veterans Affairs, government share will go from 20.5 percent in 2018 to 23.0 percent next year.
