Mortgage Bankers Lift 2016 Origination Forecast

Home-lending is projected to reach $518 billion in the third quarter then fall to $363 billion three months later and $295 billion in the first-quarter 2017.

The outlook increased from June, when volume was expected to go from $460 billion this quarter to $343 billion in the fourth quarter then fall to $295 billion.

The Mortgage Bankers Association made the latest predictions in its MBA Mortgage Finance Forecast.

MBA raised its third-quarter purchase financing forecast to $298
from $290 billion in the last outlook, while the fourth-quarter projection was left at $223 billion.

Refinances are now expected to total $220 billion in the current quarter versus the $170 billion previously predicted, and the fourth-quarter refinance outlook grew to $140 billion from $120 billion.

Full-year 2016 mortgage originations, including purchase financing and refinancing, are expected to reach $1.741 trillion, more than $1.663 trillion previously expected.

Next year’s overall forecast of $1.383 trillion and 2018’s projected $1.347 trillion were unchanged from the last report.

MBA has purchase financing totaling $0.981 trillion for all of this year, more than the $0.973 trillion previously predicted. No change was made to the 2017 purchase forecast of $1.011 trillion or the following year’s expected amount of $1.046 trillion.

The trade group expects refinance production to reach $0.760 trillion in 2016, an increase from the $0.690 trillion in the last forecast. But, as was the case with purchase financing, there was no update to the $0.372 trillion in refinance originations projected for 2017 or the $0.301 trillion predicted for the following year.

MBA has lifted its projection for 2016 refinance originations every month since December 2015, when volume was expected to be only $0.415 trillion.