Mortgage Daily

Published On: May 21, 2015

The outlook for this year’s refinances has been increased, while expectations for next year’s refinance activity have been lowered.

U.S. home lenders will originate $418 billion in the second quarter, according to the latest economic forecast for real estate finance.

Industry production is then expected to fall to $369 billion the following quarter and $333 billion in the fourth quarter.

The predictions made in Fannie Mae’s Housing Forecast: May 2015 were better than a month earlier, when originations were projected by Fannie to fall from $367 billion to $347 billion then fall again to $315 billion in the fourth quarter.

Fannie increased its second-quarter purchase forecast to $213 billion from $208 billion, while its third-quarter prediction slipped to $209 billion from $211 billion projected in April.

The refinance forecast
for the current quarter expanded to $205 billion from $159 billion in the prior forecast. Third quarter refinances are now expected to come in at $160 billion versus $136 billion previously expected.

The full-year 2015 origination forecast has been bumped up to $1.460 trillion from $1.351 trillion predicted last month. Next year’s outlook was reduced, however, to $1.179 trillion from $1.231 trillion.

On just the purchase financing portion, full-year 2015 production is
projected to be $0.759 trilion compared to $0.742 trillion expected last month. Next year’s purchase forecast inched up to $0.799 trillion from $0.798 trillion.

Expected refinances for this year jumped to $0.701 trillion from $0.609 trillion projected in April.
The 2016 refinance forecast was cut, however, to $0.381 trillion from $0.433 trillion.

Refinance share is predicted to be 48 percent in 2015 and 32 percent next year.

Adjustable-rate mortgages are expected to account for eight percent of 2015 originations and 9 percent of the following year’s business.

Fannie esimates that total mortgages outstanding will grow from $10.041 trillion this year to $10.272 trillion in 2016.

First mortgages are expected to account for $9.352 trillion of 2015’s total oustandings and $9.557 trillion of next year’s outstandings.

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