A $65 billion reduction has been made to the three-year outlook for the origination of loans to finance the acquisition of residential properties. The good news is that the bulk of hit is two years from now.
For the period that began on July 1 and concludes on Sept. 30, mortgage originations — including purchase financing and refinancing — are expected to reach $443 billion.
Home lending volume is then expected to sink to $370 billion in the fourth quarter. A further decline is predicted for the first-three months of next year, when the total is projected at just $328 billion.
The Mortgage Bankers Association, which
provided the latest predictions in its MBA Mortgage Finance Forecast, trimmed its third-quarter outlook from $449 billion in last month’s report, while the first-quarter 2019 prediction was reduced from $332 billion.
Purchase-money production is expected to tumble from $332 billion in the current quarter to $270 billion three months later.
Refinance projections are for $111 billion in the third quarter and $100 billion the following three months.
MBA has full-year overall originations at
$1.606 trillion, off from $1.612 trillion in July’s outlook. The 2019 forecast fell to $1.592 trillion from $1.608 trillion, and the following 12-month period is expected to bring $1.631 trillion in production versus $1.677 trillion previously predicted.
At $1.149 trillion for 2018, MBA’s latest purchase forecast was reduced from $1.152 trillion a month earlier. Next year’s outlook was cut to $1.197 trillion from $1.213 trillion, and the 2020 total sank to $1.236 trillion from $1.282 trillion.
Refinance production is forecasted at $0.457 trillion this year and $0.395 trillion each of the following two years. Refinance share is pegged at 28 percent for 2018, a quarter for next year, and 24 percent one year subsequent.
Mortgages outstanding are expected to grow from $10.370 billion in the fourth quarter to $10.760 trillion at the end of next year and $11.130 trillion as of Dec. 31, 2020.
