Home lending activity forecasted for this year has been increased by mortgage bankers. But a reduction in the outlook for next year’s purchase financing more than offset a slight gain in projected refinances.
Fourth-quarter residential originations by all U.S. lenders are expected to come in at $278 billion, fall to $266 billion in the following three months then bounce up to $328 billion in the first-quarter 2015.
Expected mortgage production during the current period was raised from $262 billion projected last month. First-quarter 2015 originations, however, were trimmed fro $270 billion, and the following quarter’s forecast was unchanged at $328 billion.
The Mortgage Bankers Association made the latest predictions in the MBA Mortgage Finance Forecast for November.
The trade group lifted its fourth-quarter forecast for purchase financing to $150 billion from $147 billion in its October outlook, while the projection for the following three-month period increased to $144 billion from $142 billion.
Refinances during the current quarter are now expected to come in at $128 billion versus just $115 billion predicted last month. The first-quarter 2015 refinance outlook increased to $122 billion from $128 billion.
For all of this year, MBA has overall mortgage production totaling $1.122 trillion, more than the $1.106 trillion expected in last month’s outlook. The 2015 forecast was trimmed to $1.184 trillion from $1.188 trillion, while there was no change to the $1.170 trillion prediction for the following year.
The 2014 purchase financing forecast inched up to $0.638 trillion from $0.635 trillion. MBA increased next year’s purchase projection to $0.733 trillion from $0.731 trillion and left the 2016 forecast at $0.791 trillion.
The current year’s refinance outlook increased to $0.484 trillion from $0.471 trillion, but expected 2015 refinances are now at $0.451 trillion compared to the $0.457 trillion previously expected. MBA left the 2016 refinance forecast at $0.379 trillion.
Refinance share is expected to fall from 43 percent in 2014 to 38 percent next year then decline further to 32 percent in 2016.
