This year’s outlook for mortgage refinance production has been raised, though it was to the detriment of anticipated home purchase financing volume.
Overall originations, including refinances and purchases, are expected to increase from $320 billion during the first quarter to $460 billion three months later.
Residential lending activity by all U.S. mortgage originators is then forecasted to decline to $420 billion during the third quarter of this year.
Freddie Mac made the predictions in its
February 2016 Economic and Housing Market Outlook.
Based on projected refinance share, refinance originations are forecasted at $154 billion during the current quarter and $202 during the second quarter.
Freddie increased the second-quarter refinance outlook from $161 billion in last month’s forecast.
On purchase-money production,
volume is predicted to rise from $166 billion in the first quarter to $258 billion the following period.
Projected second-quarter purchase-money production
was cut from $299 billion in the prior-month outlook.
Overall full-year
mortgage originations are predicted to diminish from $1.580 trillion this year to $1.460 trillion in 2017.
The refinance portion of full-year 2016
activity is $0.632 trillion, more than the $0.553 trillion forecasted last month. Refinances are expected to fall to $0.350 trillion next year.
Refinance share is expected to tumble from 40 percent in 2016 to 24 percent next year.
Freddie expects purchase production to be $0.948 trillion during the current year, less than the $1.027 trillion in the January outlook.
The 2017 purchase forecast is $1.110 trillion.
Freddie has Federal Housing Administration-insured loans and Department of Veterans Affairs-guaranteed loans accounting for
23.4 percent of 2015 total originations. Government share is expected to be 23.7 percent this year and 25.3 percent in 2017.
