A new economic outlook has this year’s residential originations coming in at $1.4 trillion.
The latest economic and housing market outlook from Freddie Mac predicts third-quarter residential originations from all U.S. lenders will reach $369 billion. The projection was unchanged from the August outlook.
September’s projection indicated that originations were $344 billion in the second quarter. By the fourth quarter, Freddie expects volume to settle back to $345 billion.
The third-quarter forecast calls for $100 billion in FHA and VA originations, higher than the second quarter’s $87 billion. Conventional business is predicted to rise to $269 billion from $257 billion.
Freddie estimated full-year 2010 production at $1.400 trillion, sinking from $2.000 trillion last year. Next year’s fundings are also expected to come in at $1.400 trillion.
The secondary lender predicted that refinances will account for 78 percent of the current quarter’s production, higher than 75 percent in the prior period. But refinance share will likely retreat to 69 percent in the fourth quarter.
Adjustable-rate mortgages are projected to represent 6 percent of originations during the second, third and fourth quarters.