Mortgage bankers have lifted their expectations for this year’s refinance originations, though a reduced outlook for purchase financing more than offset the increase.
Overall residential originations, including purchase financing and refinancing, are forecasted to fall from $281 billion in the third quarter to $240 billion in the final three months of this year.
The third-quarter projection increased from last month, when industry-wide production was expected to be $273 billion. But the fourth-quarter prediction fell from $255 billion.
The Mortgage Bankers Association outlined the projections in its MBA Mortgage Finance Forecast.
MBA pushed up expected third-quarter purchase financing to $166 billion from $164 billion in its June outlook, while it lowered the fourth-quarter purchase forecast to $144 billion from $158 billion.
Refinances are now expected to reach $115 billion in the current quarter versus the $109 billion expected last month, while the fourth-quarter outlook slipped to $96 billion from $97 billion.
For all of 2014, MBA has total mortgage originations coming in at $1.014 trillion, down from the prior projection of $1.021 trillion. There was no change in the $1.130 trillion forecast for 2015.
This year’s purchase outlook was reduced to $0.583 trillion from $0.595 trillion. The 2014 purchase forecast has been cut every month since October 2013, when $0.723 billion in 2014 purchase production was projected. Next year’s purchase outlook was left at $0.729 trillion.
Refinances are now expected to total $0.431 trillion in 2014 compared to last month’s prediction they would amount to $0.426 trillion, and no change was made to the 2015 forecast of $0.401 trillion.
Refinance share is predicted to fall from 43 percent in the current year to 35 percent next year.
