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| Freddie Mac has lowered its projection for 30-year mortgage rates and increased its forecast for residential originations this year. The second quarter is looking especially good.U.S. residential originations are projected to reach $2 trillion this year, Freddie reported in its January 2009 Economic and Housing Market Outlook. The projection was increased from last month’s estimate of $1.600 trillion.
FHA & VA loans are expected to account for $0.440 trillion of this year’s originations, climbing from an estimated $0.291 trillion in 2008. Conventional business is forecasted to rise to $$1.560 trillion from $1.490 trillion. Freddie maintained its $1.781 trillion estimate for 2008 originations. Next year’s originations are projected at $2.125 trillion. First-quarter 2009 mortgage fundings are predicted to reach $430 billion then jump to $555 billion in the second quarter. By the fourth quarter, originations are expected to drop back to $470 billion. The 30-year fixed-rate mortgage, which was 5.12 percent in Freddie’s Primary Mortgage Market Survey for the week ending Jan. 22, is projected to average 5.1 percent during the first quarter then climb to 5.3 percent by the fourth quarter. Last month, Freddie had the 30-year at 5.7 percent during the first-quarter 2009 and climbing to 6.2 percent by the fourth quarter. Next year, the 30-year if projected to average 5.3 percent. Freddie sees the share of adjustable-rate activity falling from 7 percent last year to 6 percent in 2009 then rising to 9 percent next year. Refinance share, which came it at 51 percent during 2008, will reach 58 percent this year and fall to 50 percent in 2010. |
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