The estimate of last year’s volume of loans to finance home purchases has been raised by more than $50 billion, though it came at the expense of refinances.
For just the fourth quarter 2016, residential loan originations — including refinances and purchase-money lending — is expected to amount to $485 billion.
Production is then expected to fall to $340 billion in the first-three months of next year. But second-quarter 2017 volume is expected to reach $460 billion.
The predictions, which were made by Freddie Mac in its October 2016 Economic & Housing Market Forecast, were no different than in its outlook from the prior month.
Based on Freddie’s projected refinance share, refinance production will account for $228 billion of current-quarter originations and $146 billion of first-quarter 2017 volume.
Purchase financing is expected to fall from $257 billion in the current quarter to $194 billion in the first-three months of next year.
Overall mortgage originations are predicted to fall from $2.000 trillion this year to $1.650 trillion in 2017.
Freddie cut its estimate of 2015 refinances to $0.788 trillion from $0.840 trillion in last month’s forecast. The 2016 refinance forecast was left at $1.000 trillion, and next year’s refinance outlook remained at $0.594 trillion.
Last year’s refinance share estimate was reduced to 45 percent from 48 percent in the last forecast. This year’s refinance share is expected to be 50 percent, and 2017’s is projected at just 36 percent.
The 2015 purchase financing outlook increased to $0.963 trillion from $0.910 trillion in the prior-month report. Purchase-money production is expected to be $1.000 trillion in 2016 and $1.056 trillion next year.
Mortgages insured by the Federal Housing Administration are expected to account for 20.9 percent of this year’s overall originations and 22.4 percent of next year’s business.
