The latest forecast for overall residential loan production this year and next year has been beefed up by nearly $250 billion. But last year’s estimate of purchase financing was cut.
During the fourth quarter, $427 billion in single-family loans are expected to be originated by U.S. home lenders. The total includes loans to finance a home purchase and refinances.
Business is then expected to tumble to $359 billion in the first-three months of next year then rise to $476 billion during the second-quarter 2018.
Fannie Mae made the predictions in its Housing Forecast: October 2017.
The secondary lender raised its current-quarter outlook from $377 billion expected last month. The first-quarter 2018 forecast grew from $322 billion, and the following period’s projection was up from $433 billion.
The outlook for purchase financing during the final-three months of 2017 was nudged up to $268 billion from $263 billion a month earlier. Purchase-money volume during the first-three months of next year is now expected
to reach $213 billion versus $209 billion in the prior report.
Expected fourth-quarter 2017 refinance originations increased to $159 billion from $113 billion last month, and first-quarter 2018 refinances are projected to reach $147 billion, more than $113 billion previously predicted.
Fannie has total originations for all of this year coming in at $1.788 trillion, more than $1.679 trillion previously predicted. Next year’s outlook jumped to $1.718 trillion from $1.578 trillion.
The estimate of 2016’s purchase financing was reduced to $1.052 trillion from $1.061 trillion in last month’s forecast. This year’s purchase forecast, though, climbed to $1.126 trillion from $1.078 trillion, and the 2018 purchase outlook grew to $1.182 trillion from $1.163 trillion.
Last year’s estimated refinance production increased to $1.000 trillion from $0.991 trillion. The 2017 refinance outlook increased to $0.662 trillion from $0.601trillion, while next year’s expected volume rose to $0.536 trillion from $0.415 trillion.
Refinance share is expected to thin from 49 percent in 2016 to 37 percent this year and 31 percent in 2018.