For the second month in a row, mortgage bankers boosted their funding forecast. A drop in the purchase-money outlook was more than offset by strengthening refinance activity.
Second-quarter residential lending by all U.S. mortgage firms will amount to around $302 billion, the Mortgage Bankers Association predicted in its Mortgage Finance Forecast.
The latest prediction reflected $116 billion in purchase production, lower than the $154 billion estimated last month for the second-quarter. Refinance volume projections were raised, however, to $182 billion from $142 predicted by MBA last month.
Second-half originations will fall off — bringing full-year volume in somewhere around $1.070 trillion, lower than the $1.572 trillion closed in 2010 but higher than the $0.966 trillion expected for next year.
The trade group has refinance share falling from nearly two-thirds in the first three months of this year to 61 percent this quarter. But third-quarter refinance share is expected to be halved to 31 percent, while the final period of the year will see a one-quarter share.
The share of originations with adjustable rates will rise from the first quarter’s 6 percent to this quarter’s 7 percent — where it is expected to remain indefinitely.