Mortgage Daily

Published On: October 16, 2018

Mortgage bankers have lifted their latest forecast for the origination of loans to finance house purchases by $120 billion over the next three years. There was even a modest bump in the three-year refinance outlook.

In the final three months of this year, primary originators are expected to generate $385 billion in single-family loan production. The total includes purchase-money and refinance volume.

Mortgage originations are then expected to tumble to $326 billion during the first three months of next year before bouncing up to $448 billion in the second-quarter 2019.

The Mortgage Bankers Association, which made the predictions in the latest installment of its MBA Mortgage Finance Forecast, lifted its outlook from last month, when it projected originations would go from $370 billion in the fourth quarter to $328 billion three months later and $443 billion in the second-quarter 2019.

MBA’s outlook for purchase production increased to $291 billion for the current quarter from $270 billion, and the first-quarter 2019 forecast was left at $326 billion.

Refinances are expected to total $94 billion this quarter, less than $100 billion previously expected. The first-quarter 2019 refinance forecast remained $100 billion.

Twelve-month overall originations are expected to go from $1.760 trillion last year to $1.636 trillion this year, $1.630 trillion in 2019, $1.683 trillion the following year and $1.740 trillion in 2021.

The trade group raised the annual totals from September, when it had originations falling from $1.710 trillion in 2017 to $1.606 trillion in 2018, $1.592 trillion next year and $1.631 trillion in 2020. The adjustment to last year’s numbers reflected the most recent Home Mortgage Disclosure Act data.

The estimate of last year’s purchase financing grew to $1.143 trillion from $1.110 trillion in last month’s report. This year’s forecast was raised to $1.185 trillion from $1.149 trillion, the 2019 outlook grew to $1.235 trillion from $1.197 trillion, and the following year’s purchase projection increased to $1.273 trillion from $1.236 trillion. MBA predicted $1.308 trillion in volume during 2021.

The report has refinances plunging from $0.616 trillion last year to $0.451 trillion in 2018 and $0.395 trillion next year. But refinances are then expected to rise to $0.410 trillion in 2020 and $0.432 trillion the following year. The trade group previously predicted refinances would be $0.600 trillion in 2017, $0.457 trillion this year and $0.395 trillion in 2020.

Refinance share is expected to thin from 28 percent this year to 24 percent each of the following two years. In 2021, the share is expected to widen to a quarter.

Growth has mortgage debt outstanding expanding from $10.392 trillion this year to $10.792 trillion in 2019, $11.172 trillion a year later and $11.521 trillion in 2021.

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