The Federal National Mortgage Association lowered its expected residential lending estimate for this year and next year, with 2015’s projected refinances taking the biggest hit.
Fannie Mae predicts that total loan originations from all U.S. lenders, including refinancing and purchase financing, will jump from $237 billion in the first quarter to $322 billion in the current period then retreat to $302 billion in the third quarter.
Last month, the Washington, D.C.-based company forecasted that production would rise from $246 billion to $328 billion in the second quarter then fall to $304 billion.
The latest projections were made in the secondary lender’s Housing Forecast: May 2014.
Fannie cut its first-quarter estimate of purchase financing to $123 billion from $128 billion in last month’s report, while the current-quarter forecast fell to $197 billion from $202 billion and the third-quarter outlook slipped to $205 billion from $208 billion.
Estimated first-quarter purchase activity was lowered to $114 billion from $118 billion, and the second quarter’s expected volume was trimmed to $124 billion from $125 billion. But the next quarter’s purchase forecast inched up to $97 billion from $96 billion.
Fannie moved up its estimate of full-year 2013 total originations to $1.913 trillion from $1.912 trillion. But this year’s expected volume was reduced to $1.122 trillion from $1.141 trillion, while the 2015 forecast was cut to $1.099 trillion from $1.132 trillion.
Last year’s estimate of purchase originations crept up to $0.732 trillion from $0.731 trillion. But Fannie lowered the 2014 purchase forecast to $0.710 trillion from $0.724 trillion and next year’s outlook to $0.822 trillion from $0.829 trillion.
The 2014 refinance projection fell to $0.412 trillion from $0.417 trillion, and next year’s outlook was cut to $0.277 trillion from $0.303 trillion.
Expected refinance share is 37 percent for 2014 and 25 percent for next year.
Eleven percent of this year’s production is expected to be adjustable-rate mortgages, while ARM share is projected to climb to 16 percent in 2015.
Total single-family mortgages outstanding are expected to expand from $9.914 trillion this year to $10.027 trillion in 2015. The first-lien portion is predicted to account for $9.226 trillion of the 2014 total and $9.338 trillion of the 2015 total.
