Mortgage bankers have grown more optimistic about the volume of refinance originations expected to close during the first half of this year.
Residential loan production by all U.S. lenders, including refinancing and purchase financing, is predicted to climb from $313 billion in the first quarter to $378 billion three months later.
But then home lending activity is expected to diminish — declining to a projected $318 billion during the third quarter.
The predictions were made by the Mortgage Bankers Association in its
Mortgage Finance Forecast for May.
MBA lifted its estimate of first-quarter volume from $288 billion in last month’s outlook. The second-quarter projection was beefed up from $363 billion.
The trade group expects purchase production
to inch up from $208 billion in the second quarter to $210 the following three months — the same as predicted in April.
But MBA raised its first-quarter estimate for refinances to $175 billion from $150 billion in the last outlook, while the second-quarter projection climbed to $170 billion from $156 billion. No change was made to the third-quarter refinance forecast of $108 billion.
For all of 2015, the association has total originations coming in at $1.281 trillion, up from $1.241 trillion expected last month. Next year’s outlook was left at $1.170 trillion.
MBA expects purchases to account for $0.730 trillion of this year’s activity, creeping up from $0.729 trillion forecasted last month.
The 2016 purchase forecast was unchanged at $0.791 trillion.
The outlook has 2015 refinances totaling $0.551 trillion, more than the $0.512 trillion projected in the last outlook. Next year’s refinances are predicted to be $0.379 trillion, no different than was previously expected.
Refinances are predicted to account for 43 percent of this year’s total originations, while the refinance share for 2016 is 32 percent.
