The most-recent housing finance forecast has annual mortgage refinance originations coming in lower than had been previously expected.
Total residential loan originations, including refinancing and purchase financing, are expected to climb from $272 billion during the first quarter to $329 billion three months later and $333 billion in the third quarter.
Last month, U.S. production was expected to rise from $266 billion in the first quarter to $360 billion in the second quarter then fall to $342 billion the following three months.
Fannie Mae made the latest predictions in its Housing Forecast: March 2015.
Purchase financing is expected to account for $119 billion of first-quarter production then rise to $192 billion in the following three-month period. Fannie previously projected that purchase volume would jump from $129 billion in the first three months of the year to $197 billion in the second quarter.
Refinance volume is forecasted to fall from $153 billion to $138 billion in the second quarter versus last month, when Fannie predicted refinances would climb from $138 billion in the first quarter to $163 billion.
Overall full-year production is predicted to rise from $1.184 trillion in 2014 to $1.239 trillion this year then slide to $1.206 trillion the following year.
Fannie lowered its full-year 2014 estimate from $1.193 trillion, while 2015’s forecast fell from $1.277 trillion and next year’s outlook was scaled back from $1.239 trillion.
This year’s
purchase-money projection was reduced to $0.684 trillion from $0.703 trillion, and the 2016 outlook was lowered to $0.781 trillion from $0.779 trillion.
Last year’ refinance estimate shrank to $0.507 trillion from $0.516 trillion estimated in the prior forecast. Fannie cut this year’ refinance forecast to $0.554 trillion from $0.574 trillion, and next year’s refinance outlook fell to $0.424 trillion from $0.460 trillion.
Refinance share is forecasted at 45 percent for this year and 35 percent for next year.
Fannie expects adjustable-rate mortgages to make up 8 percent of this year’s and 2016’s total production.
Total mortgages outstanding are projected to go from $9.846 trillion in 2014 to $9.987 trillion this year and $10.212 trillion in 2016.
First mortgages are estimated to account for $9.172 trillion of last year’s outstandings, $9.299 trillion of 2015’s outstandings and $9.498 trillion of next year’s.
