Expectations for this year’s purchase financing expanded by 12 percent, while projections for next year’s refinance production increased 14 percent.
Fourth-quarter home loan originations are expected to amount to $262 billion, more than the $240 billion that was forecasted last month.
The first-quarter 2015 origination outlook slipped to $270 billion from $271 billion, and the following quarter’s forecast leapt to $328 billion from just $288 billion.
The predictions were made in October’s MBA Mortgage Finance Forecast from the Mortgage Bankers Association.
Purchase financing originations are expected to fall from $147 billion in the final three months of this year to $142 billion in the first-quarter 2015. MBA raised the current quarter’s forecast from $137 billion but cut the following period’s outlook from $168 billion.
Refinance originations are expected to increase from $115 billion in the fourth quarter to $128 billion three months later — up from $103 billion previously predicted for each of the two quarters.
MBA lifted its total outlook for all of this year to $1.106 trillion from $1.007 trillion forecasted in the last report. Next year’s projection rose to $1.188 trillion from $1.130 trillion.
The trade group also introduced its forecast for 2016, with $1.170 trillion in overall volume expected, including $0.791 trillion in purchase production and $0.379 trillion in refinance originations.
MBA increased its outlook for this year’s purchase originations to $0.635 trillion from 0.569 trillion expected in September. Next year’s purchase forecast crept up to $0.731 trillion from $0.729 trillion, while the new 2016 outlook is for $0.791 trillion.
“We are projecting that home purchase originations will increase in 2015 as the U.S. economy continues on its current path of stronger growth, job gains and declining unemployment,” MBA Chief Economist Michael Fratantoni said in an accompanying news release. “The job market has shown sustained improvement this year; with robust monthly increases in both payroll jobs and job openings.
“We are forecasting that strong job growth, coupled with still low mortgage rates, should translate to an increase in home sales and purchase originations.”
On the refinance side, the 2014 forecast increased to $0.471 trillion from 0.438 trillion, and next year’s rose to 0.457 trillion from $0.401 trillion. The 2016 outlook for refinances is $0.379 trillion.
Refinance share is projected to fall from 43 percent this year to 38 percent in 2015 and 32 percent the following year.
