Q1 2017 Mortgage Origination Forecast Trimmed

Total home-lending activity, including purchase financing and refinancing, is expected to reach $470 billion in the fourth-quarter 2016.

Originations are then expected to fall to $352 billion in the following period and bounce up to $430 billion in the second-quarter 2017.

Those predictions were made by the Mortgage Bankers Association in its MBA Mortgage Finance Forecast.

MBA reduced its first-quarter 2017 outlook from $365 billion expected in last month’s forecast. The reduction came as the association increased expected 30-year fixed rates for the first-three months of next year to an average of 4.3 percent from 4.0 percent previously projected.

The trade group has purchase-money originations falling from $232 billion in the current quarter to $212 billion in the first-three months of next year. The first-quarter 2017 projection was reduced from $220 billion expected in last month’s report.

Refinance production is expected to tumble from $238 billion in the fourth-quarter 2016 to $140 billion the following quarter. MBA trimmed the first-quarter 2017 outlook from $145 billion expected last month.

Total originations are expected to amount to $1.891 trillion during all of 2016 then fall to $1.571 trillion
the following year. Lending activity is predicted to rise to $1.588 trillion in 2018 and $1.640 trillion a year later. The 2017 forecast was trimmed from $1.584 trillion predicted last month.

Purchase financing is forecasted to climb from $0.990 trillion this year to $1.092 trillion in 2017, $1.178 trillion the following year and $1.245 trillion in 2019. Next year’s outlook was lowered from $1.100 trillion expected as of November.

MBA has refinance volume plunging from $0.901 trillion in 2016 to $0.479 trillion in 2017, $0.410 trillion
in 2018, and $0.395 trillion a year later. The 2017 refinance forecast was lowered from $0.484 trillion forecasted the previous month.