A smaller share of last year’s mortgage originations were refinances than originally thought. This year’s refinance outlook has been reduced, as was the case for next year’s purchase forecast.
In the second quarter of this year, single-family loan originations, including loans to finance a home purchase and refinances, are expected to come to $468 billion.
National mortgage production is then expected to fall to $433 billion three months later. In the final quarter of this year, $393 billion in mortgage originations are predicted.
Secondary lender
Fannie Mae delivered the outlook in its Housing Forecast: May 2018.
Fannie lowered its forecast from last month, when it expected originations by all lenders to go from $473 billion in the current quarter to $436 billion the following three months and $396 billion in the fourth quarter.
The latest forecast is for purchase-money production to go from $340 billion in the second quarter to $334 billion in the following three-month period. The third-quarter projection was trimmed from $337 billion.
Refinances are expected to fall from $128 billion to $100 billion in the third quarter. The current-quarter’s outlook dipped from $132 billion.
Fannie lowered its estimate of overall originations for all of 2017 to $1.826 trillion from $1.842 trillion a month earlier. This year’s outlook was reduced to $1.667 trillion from $1.690 trillion, and the 2019 forecast fell to $1.670 trillion from $1.686 trillion.
Last year’s estimate of purchase production was increased to $1.177 trillion from $1.134 trillion. This year’s forecast has been trimmed to $1.186 trillion from $1.192 trillion, and the 2019 outlook eased to $1.232 trillion from $1.248 trillion.
Fannie lowered its estimate of 2017 refinances to $650 billion from $708 billion, while the 2018 projection was cut to $481 billion from $498 billion. Fannie left next year’s refinance forecast at $438 billion.
Refinance share is expected to thin from 36 percent in 2017 to 29 percent this year and 26 percent in 2019.
