For the eighth consecutive month, mortgage bankers have reduced their outlook for this year’s purchase financing. The 2015 forecast for both purchases and refinances was also lowered.
Total residential loan originations, including purchase and refinance activity, is expected to climb from $267 billion in the current quarter to $273 billion during the following three months then drop to $255 billion in the fourth quarter.
The third-quarter forecast was reduced from $289 billion predicted last month, while the fourth-quarter total fell from $264 billion.
The predictions were made in the MBA Mortgage Finance Forecast from the Mortgage Bankers Association.
Refinance originations are projected to be $109 billion in both the second and third quarters then fall to $97 billion. The May forecast had refinances falling from $110 billion in the third quarter to $95 billion.
The trade group has purchase activity rising from $158 billion to $164 billion then retreating back to $158 billion in the fourth quarter. In the previous report, purchase financing was expected to go from $179 billion in the third quarter to $169 billion three months later.
From Jan. 1 through Dec. 31 of this year, MBA expects originations to total $1.021 trillion then rise to $1.130 trillion next year. The previous forecast was for $1.046 trillion in 2014 production and $1.217 trillion in 2015 volume.
This year’s refinance projection inched up to $0.426 trillion from $0.425 trillion in the previous forecast, while the 2015 refinance outlook was trimmed to $0.401 trillion from $0.410 trillion.
Refinance share is expected to go from 42 percent in 2014 to 35 percent next year.
The Washington, D.C.-based association reduced its forecast for 2014 purchase financing to $0.595 trillion from $0.621 trillion expected a month earlier.
The 2014 projection for purchase production has been reduced by MBA each month since October 2013, when it was $0.723 trillion.
Next year’s purchase outlook was cut to $0.729 trillion from $0.807 trillion expected in last month’s forecast.
