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Mortgage Bankers Nudge Up 1st Half Refi Forecast

Mortgage bankers bolstered their projection for refinance originations during the first half, pushing this year’s overall outlook up.

Residential originations by all U.S. lenders, including refinancing and purchase financing, is expected to
climb from $281 billion in the first three months of this year to $332 billion in the second quarter.

The outlook improved from last month, when volume was expected to increase from $271 billion in the first quarter to $328 billion.

Making the latest predictions was the Mortgage Bankers Association in its
MBA Mortgage Finance Forecast for January.

Expected third-quarter originations are $318 billion, the same as projected in December.

Refinances are expected to account for
$137 billion of first-quarter production then retreat to $129 billion three months later. The outlook was raised from $127 billion for the first quarter and $124 billion in the second quarter.

The purchase financing outlook is for production to jump from $144 billion during the current quarter to $203 billion. The second-quarter quarter forecast was trimmed from $204 billion in the December outlook.

MBA pushed up its overall 2015 forecast to $1.203 trillion from $1.189 trillion, while next year’s total was unchanged at $1.170 trillion.

The trade group raised its 2015 refinance projection to $0.471 trillion from $0.456 trillion. The prediction for next year’s refinances was left at $0.379 trillion.

Refinance share is forecasted to fall from 39 percent in 2015 to 32 percent in 2016.

MBA shaved $0.001 trillion off December’s prediction for the current year’s purchase financing to $0.732 trillion, while it was left at $0.791 trillion for 2016.

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