The latest outlook for the mortgage business has volume declining each of the remaining quarters for the rest of this year, though purchase activity is showing signs of life.
Second-quarter residential loan originations are forecasted to total $378 billion then tumble to $318 billion in the following three months.
During the final quarter of this year, home loan production
is then expected to sink to just $272 billion.
The forecast, which was made by the Mortgage Bankers Association, was no different than predicted last month.
Refinances are expected to account for $170 billion of the current quarter’s activity and $108 billion of third-quarter business, while purchase financing is projected to rise from $208 billion in the second quarter to $210 billion.
For all of 2015, MBA has mortgage production amounting to $1.281 trillion. Next year’s outlook is for $1.170 trillion in volume.
Refinances are expected to drop from $0.551 trillion this year to $0.379 trillion in 2016.
The trade group has refinance share at 43 for the current year and 32 percent for 2016.
Purchase production, meanwhile, is predicted to climb from $0.730 trillion in 2015 to $0.791 trillion next year.
“Single family starts and housing in general should begin to pick up again as economic growth continues at its current pace and as wage pressures increase, leading to increased household formation,” MBA said in an accompanying commentary. “Household formation, especially owner households, is one of the most significant drivers of purchase activity in the housing market. We saw an increase in total households toward the end of 2014 and expect to see increasing growth in owner households during the balance of 2015 and into 2016.”
The association noted that while purchase applications have “not been spectacular,” they have been up on a year-over-year basis by an average of 14 percent each of the past two months.
