A more than one-third drop in projected U.S. production this year begins with nearly a one-third decline in first-quarter activity. Leading the decline are refinances.
The January MBAÂ Mortgage Finance Forecast has first-quarter 2011 fundings falling to $270 billion from $395 billion in the final quarter of last year. Second-quarter originations will ease further to $267 billion.
Refinance share will shrink to 56 percent from nearly three-quarters in the last three months of 2010 then continue diminishing until the third quarter of 2011 — when it is expected to settle in at a quarter.
The share of originations that will be adjustable-rate mortgages will inch up to 6 percent this quarter from 5 percent then spend the following seven quarters at 7 percent, MBA said.
Full-year production will tumble from last year’s $1.505 trillion to $0.966 trillion then inch up to $0.976 trillion in 2012.
