This year’s projected home-loan production was increased, with the outlook raised for both refinance and purchase originations. But the outlook was lowered for mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs.
Second-quarter residential originations by all U.S. lenders are forecasted to slip to $365 billion from the first quarter’s $380 billion.
By the third quarter, just $300 billion is expected to be originated by the nation’s mortgage bankers.
But despite the declining trend, the latest numbers are an improvement from Freddie Mac’s outlook in April, when fundings were expected to rise from the first quarter’s $340 billion to $355 billion during the current three-month period.
The refinance outlook is for originations to fall to $256 billion this quarter from the first-quarter’s $285 billion, improving from last month’s expectations that refinance volume would fall from $255 billion to $249 billion. Third-quarter refinances are expected to total $180 billion, the same as forecasted in the previous report.
Refinance share is forecasted at 70 percent this quarter and 60 percent for the entire second-half 2012.
Purchase financing is expected to amount to $110 billion in the second quarter and $120 billion in the third quarter, a little better than last month when respective volume was predicted to come in at $107 billion and $120 billion.
The estimate of government mortgage production during the first quarter was lifted to $82 billion from last month’s $76 billion. But the second-quarter government loan forecast was lowered to $80 billion from $85 billion, and the third-quarter projection was cut to $66 billion from $75 billion.
The latest forecast has adjustable-rate mortgage share at 15 percent this quarter and each quarter through the end of next year.
Freddie raised its estimate of full-year 2011 production to $1.400 trillion from $1.390 trillion in last month’s report.
This year’s forecast is for $1.300 trillion in home-loan fundings, up from the $1.250 billion predicted in the prior outlook. There was no change in the 2013 forecast of $1.070 trillion.
The 2012 forecast for government mortgage production was lowered to $284 billion from the $300 billion projected in the previous outlook. Next year’s government originations are expected to come in at $246 billion, less than the $260 billion predicted a month earlier.
Refinance share is expected to slip from 69 percent last year to two-thirds during 2012 then fall to 55 percent next year.
