A reduction in expected purchase financing this year and next year from Fannie Mae was more than offset by an improved forecast for refinances.
From July 1 through Sept. 30 of this year, the secondary lender predicts that total mortgage originations by all U.S. lenders will come to $519 billion.
Business is then expected to fall to $439 billion during the fourth quarter and descend further to $334 billion in the first-three months of next year.
Economists at the Washington-based company made the predictions in the Housing Forecast: September 2016.
In last month’s forecast, Fannie had volume falling from $496 billion in the third quarter to $420 billion in the final-three months of this year.
Fannie reduced its current-quarter prediction for purchase-money
mortgages to $287 billion from $294 billion expected in the August outlook, while the fourth-quarter purchase forecast dipped to $248 billion from $249 billion.
But the government-controlled enterprise lifted its
third-quarter refinance forecast to $232 billion from $202 billion, while the refinance outlook for the final quarter of 2016 increased to $191 billion from $171 billion.
For all 12 months of this year, total mortgage production is expected to be $1.803 trillion, more than the $1.762 trillion expected last month. The 2017 projection, however, slipped to $1.548 trillion from $1.556 trillion.
The 2016 prediction for purchase-money production was trimmed to $1.005 trillion in this month’s forecast from $1.014 trillion in August. Next year’s purchase financing is now expected to total $1.012 trillion versus $1.020 trillion projected in the
prior-month report.
But Fannie lifted this year’s refinance forecast by $0.050 trillion to $0.797
trillion, while the 2017 refinance outlook was left at $0.536 trillion.
Refinance share is predicted to thin from 44 percent in 2016 to 35 percent the following year.
