U.S. mortgage bankers have lowered their three-year housing forecast for purchase-money loan originations by more than $80 billion.
For the three months ended Sept. 30, total home-loan production by all origination firms is predicted to total $449 billion. The total is the sum of refinances and purchase financing.
Business is then expected to sink to $370 billion in the fourth quarter. During the first-three months of next year, the outlook is for $332 billion in total originations.
Those projections came from the Mortgage Bankers Association in its MBA Mortgage Finance Forecast.
The trade group cut its forecast from last month, when it predicted home lending would plunge from $462 billion this quarter to $370 billion in the final-three months of this year and $355 billion in the first-quarter 2019.
MBA reduced its third-quarter forecast for the origination of loans to finance house purchases to $335 billion from $350 billion, while the following quarter’s expected purchase production was left at $270 billion.
Expected refinances were mostly unchanged from last month’s report at $114 billion for this quarter and $100 billion for the following three-month period.
Overall full-year mortgage originations are expected to fall from $1.612 trillion in 2018 to $1.608 trillion next year and $1.677 trillion in 2020. MBA previously had volume going from $1.625 trillion this year to $1.645 trillion in 2019 and $1.712 trillion a year later.
The 2018 purchase projection decreased to $1.152 trillion from $1.167 trillion predicted in the June outlook. Next year’s forecast was cut to $1.213 trillion from $1.250 trillion, and the 2020 outlook fell to $1.282 trillion from $1.317 trillion.
MBA has refinance volume at $0.460 trillion this year and $0.395 trillion each of the following two years.
Refinance share is expected to thin from 29 percent in 2018 to a quarter next year and 24 percent in 2020.
MBA has mortgage debt outstanding expanding from $10.370 trillion at the end of this year to $10.760 trillion as of Dec. 31, 2019, and $1.130 trillion at the conclusion of 2020.
