Expectations for refinance originations during the first quarter were lifted — though at the expense of projected purchase loan production.
Residential loan originations, including refinancing and purchase financing, are expected to total $350 billion during the first three months of this year.
Mortgage production is then expected to jump to $425 billion in the second quarter. Third-quarter mortgage originations are forecasted at just $333 billion.
The projections were made by Freddie Mac in its March 2014 Economic and Housing Market Outlook.
Based on Freddie’s expected refinance share, first-quarter refinance production is predicted to be $168 billion. The secondary lender raised the first-quarter refinance outlook from $154 billion projected last month.
Freddie still expects $170 billion in second-quarter refinances and $110 billion in third-quarter activity.
Purchase originations are expected to climb from $182 billion in the current period to $255 billion then retreat to $223 billion. The first-quarter purchase outlook was reduced from $196 billion expected last month.
Full-year total mortgage originations are expected to fall from $1.350 trillion in 2014 to $1.180 trillion next year.
The refinance forecast was raised to $0.527 trillion for this year from $0.513 trillion expected last month, while the 2015 refinance outlook remained at $0.236 trillion.
Refinance share is expected to fall from 39 percent in 2014 to 20 percent the following year.
Full-year purchase financing it anticipated to be $0.824 trillion during the current year versus the $0.837 trillion expected last month. The 2015 purchase forecast was left at $0.944 trillion.
Freddie has Federal Housing Administration share going from 20.0 percent in 2014 to 21.0 percent next year.
Twelve percent of this year’s originations are expected to be adjustable-rate mortgages. ARM share is forecasted to increase to 15 percent in 2015.
