The estimate of refinances originated last year was revised up, while the forecast for purchase financing has been nudged up for this year and next year.
Total home-lending activity, including refinancing and purchase financing, is expected to fall from $444 billion this quarter to $416 billion in the third quarter.
A further decline is projected for the final-three months of this year, when $362 billion in residential loans are expected to be originated.
Fannie Mae provided the outlook in
its Housing Forecast: April 2017.
The
second-quarter prediction was raised from $433 billion projected in March’s forecast, while the following three month’s outlook was trimmed from $419 billion and the fourth-quarter expectation was shaved from $366 billion.
The report had second-quarter refinance originations at $139 billion, more than $131 billion expected last month. The following quarter’s refinance outlook was reduced, however, to $109 billion from $114 billion.
Fannie inched up its current-quarter purchase-money forecast to $306 billion from $303 billion and raised the third-quarter
projection to $308 billion from $305 billion.
For all of 2016, Fannie raised its estimate of overall originations to $1.963 trillion from $1.941 trillion estimated in March. This year’s projection was increased to $1.578 trillion from $1.567 trillion, and the 2018 forecast rose to $1.534 trillion from $1.528 trillion.
Looking at just refinances, Fannie now estimates last year’s volume at $0.949 trillion versus $0.927 trillion estimated in the last report.
No change was made to the $0.510 trillion in refinances expected in 2017 and the $0.381 trillion projected for next year.
Refinance share is expected to thin from 32 percent this year to 25 percent in 2018.
Loans to finance a home purchase are expected to account for $1.068 trillion of 2017’s production, up from $1.057 trillion predicted last month. The following year’s purchase outlook increased to $1.153 trillion from $1.147 trillion.
