The forecast for residential production has been cut, and U.S. originations are expected to fall by one-fifth this year.
First-quarter residential originations are forecasted by Freddie Mac to reach $375 billion, according to the secondary lender’s February 2010 Economic and Housing Market Outlook. Freddie lowered its first-quarter forecast from $381 billion last month.
The latest projection is a decline from an estimated $450 billion in the fourth-quarter 2009 and $450 billion estimated for the first-quarter 2009.
First-quarter conventional production is predicted to tumble to $280 billion from the prior quarter’s $340 billion, while government activity is forecasted to fall to $95 billion from $110 billion.
During all of 2010, Freddie said volume is expected to reach $1.6 trillion, declining from an estimated $2.0 trillion last year. Last month’s forecast had this year’s originations pegged at $1.75 trillion.
Conventional business is expected to account for $1.2 trillion of 2010’s business, while government fundings will reach $400 billion.
Refinances are expected to represent 70 percent of first-quarter production, falling from the previous period’s 79 percent. The full year’s refinance share is expected to fall to half from three-quarters last year.
