The Federal National Mortgage Association has increased this year’s and next year’s projected loan originations by $185 billion.
Single-family mortgage originations are expected to reach $500 billion in the third quarter then fall to $412 billion three months later.
Fannie Mae then predicts that U.S. lenders will generate $333 billion in residential loan production during the first-quarter 2017.
That is according to the secondary lender’s
Housing Forecast: July 2016.
The current-quarter
prediction was increased from $457 billion projected in last month’s outlook, while fourth-quarter expected volume was raised from $381 billion and the following quarter’s forecast grew from $308 billion.
“Brexit’s economic impact on the U.S. will likely be limited, especially from a trade perspective, and should be a near-term positive for the housing and mortgage market as falling mortgage rates have prompted new refinance demand,” Fannie Mae Chief Economist Doug Duncan explained in an accompanying statement.
Fannie raised its third-quarter 2016 purchase financing outlook to $295 billion from $287 billion in last month’s forecast, while the fourth-quarter projection was trimmed to $0.250 billion from $0.253 billion.
Refinance production is now expected to come in at $205 billion during the current quarter versus the $170 billion expected last month. The fourth-quarter refinance estimated grew to $162 billion from $128 billion.
For all 12 months of this year total mortgage production is expected to reach $1.748 trillion, up from $1.663 trillion in the last forecast.
The 2017 origination outlook grew to $1.550 trillion from $1.450 trillion.
Fannie boosted this year’s projected purchase production to $1.015 trillion from $1.004 trillion, and next year’s was raised to $1.022 trillion from $1.010 trillion.
Refinances are now predicted to reach $0.733 trillion in 2016 compared to $0.659 trillion projected a month earlier. Next year’s refinance forecast was raised to $0.528 trillion from $0.440 trillion.
Refinance share is expected to drop from 42 percent in the current year to 34 percent in 2017.
