An increase in next year’s expected refinance originations has now pushed projected total mortgage production for 2015 past this year’s expected activity.
Residential loan originations by all U.S. lenders are expected to amount to $289 billion during the fourth quarter.
Mortgage production is then expected to decline
to $257 billion in the first three months of next year then bounce up to $303 billion in the second quarter.
The prediction’s were made in Fannie Mae’s
Housing Forecast: December 2014.
In its November outlook, the secondary lender had home lending going from $288 billion to $232 billion in the first-quarter 2015 and $281 billion in the following three-month period.
The forecast for purchase financing is $174 billion in the fourth quarter, $137 billion three months later and $198 billion in the second-quarter 2015 — hardly changed from the prior outlook.
While the current quarter’s refinance projection was little changed from the $114 billion expected last month, the first-quarter 2015 refinance forecast jumped to $120 billion from $95 billion, and the following quarter’s forecast increased to $105 billion from $83 billion.
Full-year 2014 overall originations are
expected to reach $1.124 trillion, about the same as predicted in November. But the 2015 outlook jumped to $1.133 trillion from the $1.043 trillion that Fannie projected last month.
Purchase financing is expected to account for $0.672 trillion of this year’s business and $0.714 trillion of the 2015 total — mostly unchanged from the prior month’s outlook.
While the 2014 refinance forecast was hardly changed at $0.452 trillion, next year’s refinance volume is now expected to come in at $0.420 trillion versus the $0.331 trillion projected last month.
Fannie has refinance share at 40 percent this year and at 37 percent for 2015.
Adjustable-rate mortgages are predicted to account for
9 percent of 2014 and 2015 production.
Fannie has mortgages outstanding growing from $9.850 trillion in 2014 to $9.893 trillion next year. First liens are projected to account for $9.174 trillion of this year’s outstandings and $9.210 trillion of the 2015 total.
