Since last month, Fannie Mae has increased its expectations for this year’s and next year’s refinance mortgage originations by $142 billion.
The secondary lender predicts total originations, including refinances and purchase transactions, will be $266 billion during the first quarter of this year.
That was $3 billion less than what was predicted last month for U.S. residential mortgage production by all lenders.
Fannie reported the latest projections in its
Housing Forecast: February 2015.
The second-quarter forecast, however, was lifted to $360 billion from $321 billion in the previous outlook, while the third-quarter projection jumped to $342 billion from $307 billion.
Purchase financing is expected to soar from $129 billion during the current quarter to $197 billion in the second quarter. The first-quarter projection was cut $7 billion from last month, while the second-quarter forecast inched up $2 billion.
The prediction for first-quarter refinances increased to $138 billion from $133 billion, and the second-quarter refinance outlook jumped to $163 billion from $126 billion.
Fannie sees overall full-year mortgage production climbing from $1.193 trillion last year to $1.277 trillion in 2015 then dipping to $1.239 trillion next year.
The 2014 forecast was raised from $1.167 trillion in Fannie’s last outlook, while this year’s projection increased from $1.181 trillion and the 2016 prediction rose from $1.186 trillion.
Purchases accounted for $0.676 trillion of last year’s originations, $0.014 trillion more than Fannie previously estimated. The 2015 purchase forecast inched up $0.001 to $0.703 trillion, and next year’s purchase forecast moved $0.006 trillion higher to $0.779 trillion.
The 2014 refinance estimate ascended $$0.010 trillion from the previous outlook to $0.516 trillion in February’s report.
This year, Fannie now expects $0.574 trillion in refinance production, $0.095 trillion more than expected last month. In 2016, refinances are expected to reach $0.460 trillion, $0.047 trillion more than previously expected.
Refinance share is projected to retreat from 45 percent in 2015 to 37 percent in 2016.
Total mortgage outstanding are expected to grow from $9.862 trillion in 2014 to $9.957 trillion this year and $10.173 trillion next year.
First mortgages accounted for $9.187 trillion of last year’s number, $9.271 trillion of the 2015 total, and $9.462 trillion of next year’s outstandings.
