The forecast for next year’s refinance share has been trimmed, while the outlook for overall originations during the first half of 2013 has been slashed. Fundings during the first three months of next year are expected to tumble by more than $100 billion from the current quarter. Meanwhile, the estimated share of borrowers opting for an adjustable-rate mortgage has been raised.
Residential loan production by all U.S. lenders is expected to fall to $270 billion during the first-quarter 2012 from an expected $371 billion in fourth-quarter 2011 originations.
That was the exact same forecast that Freddie Mac made last month.
Full-year 2012 production is predicted to be $1.135 trillion, marginally higher than $1.300 trillion expected for all of this year.
But Freddie cut its first-half 2013 forecast to just $595 trillion from last month’s projection of $855 billion.
Refinance share of production is expected to fall from 80 percent this quarter to 75 percent during the first three months of next year. Freddie previously had first-quarter 2012 refinance share at 77 percent. During all of next year, refinance share is expected to come in at just under two-thirds, lower than a little over two-thirds Freddie forecasted last month.
Projected refinance share in 2013 has been cut to half from the 60 percent share Freddie predicted in November.
Freddie upped its expectation for ARM share to 13 percent in 2012 from last month’s ARM share prediction of 12 percent. The secondary lender bumped expected ARM share to 13 percent for the current quarter from 12 percent forecasted in the previous outlook.