The projected volume of residential loans expected to be refinanced this year has been increased from last month’s forecast.
Second-quarter mortgage originations, including refinances and purchase-money transactions, are predicted to reach $482 billion.
Volume is then expected to fall to $457 billion during the second quarter and retreat further to $381 billion three months later.
The predictions were made by Fannie Mae in its Housing Forecast: June 2016.
Fannie raised its current-quarter forecast from $474 billion predicted last month, while the third-quarter outlook increased from $441 billion.
Purchase-money business is expected to go from $284 billion this quarter to $287 billion three months later. Fannie increased the second-quarter forecast from $282 billion.
The outlook is for refinance production to fall from $198 billion in the second quarter to $170 billion three months later. Refinances were projected last month to fall from $192 billion
to $154 billion in the third quarter.
Full-year overall originations are forecasted to decline from $1.663 trillion this year to $1.450 trillion in 2017. The secondary lender increased its 2016 outlook from $1.648 trillion in the last forecast, while next year’s projection was trimmed from $1.451 trillion.
Purchase financing is expected to rise from $1.004 trillion during the current year
to $1.010 trillion. The last report had purchases going from $1.002 trillion to $1.011 trillion in 2017.
Fannie raised its 2016 refinance forecast to $0.659 trillion from $0.645 trillion, while next year’s refinance outlook stayed at $0.440 trillion.
The increase in expected refinance volume comes as
average 30-year fixed mortgage rates have tumbled from 3.97 percent the first week of this year to just 3.54 percent in the week ended June 16 — the lowest they’ve been all year– according to Freddie Mac.
Refinance share is expected to tumble from 40 percent this year to 30 percent in 2017.
