Following an increase in forecasted loan originations, expectations have eased somewhat for this year’s activity. Next year’s projection for refinancing has been raised at the expense of expected purchase financing.
The latest outlook for mortgage lending has loan originations falling from $442 billion in the third quarter to $396 billion during the final three months of 2013 and $317 in the first three months of next year.
Last month’s outlook had third-quarter production at $457 billion, fourth-quarter volume at $387 billion and first-quarter 2014 fundings at $308 billion.
The most recent predictions were made in Fannie Mae’s Housing Forecast: November 2013.
Refinance volume is expected to decline from $242 billion to $224 billion in the current quarter then fall to $169 billion in the first quarter of next year. Fannie previously had refinance originations going from $249 billion to $215 billion then dropping to $159 billion.
Purchase financing is estimated at $201 for the third quarter then expected to retreat to $172 billion in the following period and $148 billion in the first-quarter 2014. Fannie previously predicted that purchase volume would fall from $208 billion to $171 billion then drop to $149 billion in the first quarter of next year.
The outlook for full-year 2013 originations was trimmed to $1.822 trillion from $1.827 trillion in the last report. Next year’s forecast was unchanged at $1.358 trillion.
Last month, Fannie lifted its 2013 outlook by more than $80 billion, while next year’s forecast was raised by nearly $300 billion.
This year’s refinance projection inched up to $1.133 trillion from $1.132 trillion, and next year’s forecast increased to $0.562 trillion from $0.550 trillion.
But the 2013 purchase outlook fell to $0.689 trillion from $0.695 trillion, while expected 2014 volume was cut to $0.796 trillion from $0.808 trillion.
Fannie estimates that refinance share will move down from 62 percent in 2013 to just 41 percent next year.
The share of business that is expected to be adjustable-rate mortgages is 7 percent this year and 10 percent next year.
Out of $9.792 trillion in outstanding mortgages estimated for 2013, $9.075 trillion are expected to be first liens. Next year’s $9.928 trillion in total mortgages are expected to include $9.220 trillion in first liens.