Economists at the Federal National Mortgage Association have scaled back their forecast for residential loan originations this year.
During the first three months of 2014, Fannie Mae expects mortgage production at all U.S. lenders to total $227 billion.
Business is then expected to climb to $355 billion in the second quarter before retreating to $333 billion in the following three-month period.
The Washington, D.C.-based company made the predictions in its Housing Forecast: March 2014.
In its February outlook, Fannie had volume jumping from $284 billion in the first quarter to $361 billion then falling to $336 billion in the third quarter.
The first-quarter refinance projection was slashed to $98 billion from $142 billion, while the expected second-quarter volume was raised to $143 billion from $137 billion. Third-quarter refinance volume is now expected to be $118 billion versus $113 billion in the last report.
On the purchase side, Fannie lowered its first-quarter outlook to $128 billion from $141 billion and reduced its second-quarter projection to $212 billion from $224 billion. Third-quarter purchase financing is expected to total $215 billion compared to the $224 billion predicted in its prior outlook.
For all 12 months of this year, Fannie predicts mortgage originations will amount to $1.209 trillion, down from $1.278 trillion expected last month. The 2015 forecast, however, was lifted to $1.181 trillion from $1.176 trillion.
The 2014 refinance projection was lowered to $0.466 trillion from $0.491 trillion, while next year’s refinance outlook inched up to $0.332 trillion from $0.326 trillion.
Fannie has refinance share going from 39 percent this year to 28 percent in 2015.
The projected production of loans to finance home purchases fell to $0.744 trillion for 2014 versus the $0.787 trillion predicted in the last report. Next year’s expected purchase originations slipped to $0.849 trillion from the $0.850 trillion expected as of February.
Adjustable-rate mortgages are expected to account for 10 percent of 2014 business and 15 percent of next year’s activity.
Fannie has mortgages outstanding ending this year at $9.936 trillion then climbing to $10.099 trillion in 2015.
First mortgages are expected to account for $9.230 trillion of 2014 outstandings and $9.382 trillion of next year’s U.S. book.
