The economic outlook for this year’s
single-family loan originations has grown more optimistic. But next year’s forecast is slightly more pessimistic.
During the final-three months of this year, $438 billion in aggregate U.S. mortgage production is forecasted. The total reflects refinances and loans to finance home purchases.
Home lending it then expected to tumble to $358 billion in the first-three months of next year before soaring to $475 billion in the second quarter.
Fannie Mae, which made the predictions in its Housing Forecast: November 2017, raised its fourth-quarter 2017 outlook from $427 billion expected in last month’s forecast.
Home purchase financing accounted for $276 billion of fourth-quarter 2017 production, more than $268 billion expected a month earlier. First-quarter purchase lending is projected to reach $212 billion.
Fannie has refinances retreating from $162 billion this quarter to $147 billion three months later, not much different than in October’s outlook.
The prediction for overall originations this year was lifted to $1.805 trillion from $1.788 trillion in the last forecast. The 2018 outlook was trimmed to $1.710 trillion from $1.718 trillion. Fannie projected that 2019 production will decline to $1.669 trillion.
Purchase financing is expected to rise from $1.133 trillion in 2017 to $1.173 trillion next year and $1.221 trillion in 2019. The 2017 forecast was lifted from $1.126 trillion the prior month, but the 2018 outlook was lowered from $1.182 trillion.
Fannie has refinances at
$0.672 trillion this year, a little more than the $662 trillion it expected last month. The 2018 refinance forecast is $0.536 trillion, and the 2019 projection is $0.448 trillion.
Refinance share is expected to thin from 37 percent this year to 31 percent in 2018 and 27 percent in 2019.
