Mortgage Daily

Published On: October 24, 2017

In addition to lifting the estimate of originations last year by $160 billion, mortgage bankers have increased this year’s and next year’s forecast by $38 billion.

During the final-three months of this year, one-to-four-family U.S. mortgage originations by all lenders are expected to come in at $393 billion.

Loan production is projected to then fall to $355 billion in the first-three months of next year then bounce up to $445 billion in the second quarter.

The Mortgage Bankers Association, which disclosed its latest expectations in its MBA Mortgage Finance Forecast, raised its fourth-quarter prediction from $370 billion in last month’s outlook, while the first-quarter 2018 projection increased from $345 billion.

MBA expects purchase financing to fall from $240
in the current quarter $230 billion three months later. The first-quarter 2018 purchase forecast was reduced from $240 billion in the September report.

The trade group increased its expectations for fourth-quarter refinances to $153 billion from $130 billion predicted a month earlier, while the following quarter’s prediction was raised to $125 billion from $105 billion.

The estimate of 2016 overall originations was increased to $2.051 trillion from $1.891 trillion in the September outlook. The revision by the association follows the recent release of Home Mortgage Disclosure Act data.

The forecast for this year was lifted to $1.688 trillion from $1.659 trillion, while the 2018 outlook expanded to $1.597 trillion from $1.588 trillion. MBA predicts that 2019 originations will total $1.640 trillion, and 2020 production will be $1.712 trillion.

Estimated purchase lending activity during all 12 months of last year was raised to $1.052 trillion from $0.990 trillion in the report from a month earlier. No changes were made to this year’s expected $1.088 trillion in purchase lending, while next year’s outlook was trimmed to $1.167 trillion. MBA projects $1.245 trillion in 2019 purchase transactions and $1.317 trillion in 2020.

Last year’s estimation of refinance production jumped to $0.999 trillion from $0.901 trillion reported last month. The 2017 refinance forecast grew to $0.600 trillion from $0.571 trillion, and the 2018 outlook expanded to $0.430 trillion from $0.410 trillion. Refinance originations are expected to total $0.395 trillion in each of 2019 and 2020.

Refinance share is expected to thin from 49 percent in 2016 to 36 percent this year and 27 percent next year. The share is projected at 24 percent in 2019 and 23 percent in 2020.

There was an estimated $9.710 trillion in
one-to-four-family mortgage debt outstanding as of the end of last year. The total is expected to grow to $10.010 trillion by the end of this year, $10.370 trillion at the finish of 2018, $10.760 as of the close of 2019 and $11.130 trillion as 2020 comes to a conclusion.

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