Freddie Lifts Q1 Mortgage Refinance Forecast

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MORTGAGE EXPERT
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The outlook for refinance production during the first-three months of this year has been raised by Freddie Mac, though at the expense of subsequent quarters.

The secondary lender predicts that total first-quarter
mortgage originations, including purchase financing and refinancing, are expected to total $325 billion.

Home lending is then projected to
climb to $430 billion during the following three-month period before settling back to $420 billion in the third-quarter 2017.

Freddie made the predictions in its
January 2017 Economic & Housing Market Forecast.

The current period’s projection was increased from $300 billion expected in the December forecast. But the second-quarter was cut from $450 billion previously predicted, while the following quarter’s outlook fell from $430 billion.

Based on forecasted refinance share, the first-quarter refinance forecast expanded to $130 billion from $105 billion in last month’s outlook. But the second quarter projection was cut to $120 billion from $140 billion.

Purchase-money lending is expected to soar from $195 billion this quarter to $310 billion three months later. The purchase financing outlook was mostly unchanged.

Freddie predicts that overall full-year originations will go from $2.000 trillion in 2016 to $1.505 trillion this year and $1.500 trillion in 2018. No change was made from the last forecast.

Refinances are expected plunge from $0.940 trillion last year to $0.421 trillion in 2017 and $0.300 trillion next year. Freddie didn’t make any changes to its full-year refinance outlook from the last report.

Refinance share is expected to thin from 47 percent in 2016 to 28 percent in the current year and 20 percent in 2018.

The purchase-money estimate for last year was left at $1.060 trillion, as was the 2017 $1.084 trillion projection and next year’s $1.200 trillion forecast.

Government mortgage share of originations is estimated at 21.7 percent for 2016, 24.5 percent this year and 21.7 percent next year.

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Mortgage Daily Staff

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