Expectations for quarterly residential lending volume have been lifted 10 percent by mortgage bankers. All of the improvement in loan production is concentrated in the refinance category.
Second-quarter home-loan fundings by all U.S. lenders was projected last month to total $305 billion.
But this month’s outlook has the number coming in at $334 billion, rising from $318 billion estimated for the first quarter. A huge dropoff is predicted for second-half 2012 originations.
The forecast was issued by the Mortgage Bankers Association.
The Washington, D.C.-based organization’s prediction is supported by an increase in new applications during both January and February reported by the Federal Housing Administration. In addition, JPMorgan Chase & Co. reported that its new loan applications climbed to $59.9 billion in the first quarter from $52.6 billion in the fourth quarter, while Wells Fargo & Co. said home mortgage applications jumped to $188 billion from $157 billion.
Purchase business is projected to rise to $107 billion from the first quarter’s $80 billion and expand each quarter through mid-2013.
Refinance originations, meanwhile, are forecasted to slip to $227 billion in the second quarter from $239 billion.
Adjustable-rate share is expected to go from 4 percent to 5 percent then spend the second half of the year at 6 percent.
Full-year 2012 originations are predicted to fall to $1.097 trillion from $1.262 trillion in 2011 then slip further in 2013 to $1.063 trillion. This year’s projection was raised from a $1.068 trillion prediction made last month by trade group.
