The economic outlook for real estate finance looks a little better this month than it did last month thanks to an improved refinance forecast.
During the final three months of this year, $400 billion in real estate loans are expected to be originated by U.S. mortgage banking firms.
Business is then expected to fall to $310 billion in the first quarter of next year and bounce up to $379 during the following three months.
The predictions were made by Fannie Mae in its
Housing Forecast: December 2015.
Last month, mortgage production was expected to go from $401 billion in the current quarter to $306 billion then rise to $380 billion in the second-quarter 2016.
Fannie
reduced its fourth-quarter 2015 purchase financing forecast to $236 billion from $244 billion, while its first-quarter 2016 outlook was unchanged at $173 billion.
Refinances are expected to amount to $164 billion in the fourth quarter versus $157 billion previously expected, while the following quarter’s refinance projections inched up to $137 billion from $133 billion.
The secondary lender has overall full-year 2015 mortgage originations going from $1.711 trillion to $1.410 trillion next year and $1.390 trillion in 2017.
The previous outlook had volume pegged at $1.405 trillion for 2016 and $1.388 trillion the following year.
This year’s
purchase production forecast fell to $0.916 trillion from $0.923 trillion, and next year’s projection slipped to $0.952 trillion from $0.953 trillion. Fannie trimmed its 2017 purchase forecast to $0.997 trillion from $0.998 trillion.
Refinances are expected to total $0.795 trillion in all of 2015 compared to the $0.788 previously projected. The 2016 refinance outlook improved to $0.458 trillion from $0.452 trillion, while the following year’s refinance forecast was raised to $0.393 trillion from $0.389 trillion.
Fannie estimates that refinance share will fall from 46 percent in 2015 to 32 percent next year and 28 percent in 2017.
