Fannie Mae has lowered its expectations for mortgage originations this year and next year — with the purchase financing outlook taking the biggest hit.
Fourth-quarter residential loan originations by all U.S. lenders are expected to come in at $260 billion then fall to $218 billion in first three months of next year. Second-quarter 2015 volume is expected to rise to $272 billion.
Last month, Fannie had production going from $243 billion to $225 billion in the first-quarter 2015 then jumping to $286 billion.
The latest numbers were outlined in the Washington-based company’s Housing Forecast: October 2014.
Although Fannie’s expectations were unchanged from September for the current quarter’s $174 billion in purchase financing, the first-quarter 2015 purchase outlook was reduced to $137 billion from $150 billion expected last month.
The fourth-quarter refinance forecast was increased to $87 billion from $69 billion, while expected refinance volume for the following quarter was lifted $6 billion to $81 billion.
The secondary lender went back and revised its estimate for overall 2013 originations down to $1.866 trillion from $1.913 previously expected. In addition, this year’s projection slipped $7 billion to $1.098 trillion, and the 2015 forecast fell to $1.013 trillion from $1.047 trillion.
Last year’s purchase estimate was lifted to $0.743 trillion from $0.732 trillion. But the 2014 forecast declined $4 billion to $0.674 trillion, while next year’s outlook fell to $0.712 trillion from $0.778 trillion.
Refinance volume for 2013 is now estimated at $1.123 trillion versus the $1.181 trillion previously estimated. For this year, Fannie now expects $0.425 trillion in refinance closings, down $2 billion. But the 2015 refinance forecast jumped to $0.301 trillion from $0.269 trillion.
Refinance share is expected to tumble from 60 percent last year to 39 percent in 2014 then fall further to 30 percent next year.
Adjustable-rate mortgages are expected to account for a tenth of this year’s total business and 11 percent of 2015 production.
Fannie estimates that total mortgages outstanding will go from $9.895 trillion as of 2013 to $9.909 trillion this year. By 2015, outstandings are expect to reach $10.054 trillion.
First liens account for $9.192 trillion of 2013’s outstandings, $9.229 trillion of this year’s and $9.359 trillion of the 2015 total.
