While economists at other large mortgage organizations cut their forecasts for next year’s annual purchase originations, Fannie Mae raised its. In addition, Fannie was the only one to lift its overall origination outlook for this year and next year.
In its Housing Forecast: June 2014, the Washington, D.C.-based company has U.S. residential loan production falling from $318 billion in the second quarter to $311 billion in the following three months and $264 billion in the final quarter of 2014.
Although the current quarter’s outlook was lowered from $322 billion predicted last month, third-quarter expectations were lifted from $302 billion and the fourth-quarter projection rose from $261 billion.
The second-quarter purchase forecast was trimmed by $5 billion to $192 billion, and the third-quarter projection inched up $1 billion to $206 billion.
Fannie added $2 billion to its current-quarter estimate for refinances, which now stands at $126 billion, and the third-quarter refinance outlook increased by $8 billion to $105 billion.
The secondary lender now has full-year 2014 total originations coming in at $1.130 trillion versus $1.122 trillion predicted in the last report. Next year’s origination outlook expanded to $1.119 trillion from $1.099 trillion.
In contrast, Freddie Mac left both its 2014 and 2015 forecasts unchanged from May, while the Mortgage Bankers association cut its projections for both years.
This year’s purchase production is projected by Fannie to land at $0.707 trillion, less than the $0.710 trillion expected in May. The 2015 forecast for purchase financing, however, inched up $0.826 trillion to $0.822 trillion.
Both Freddie and MBA lowered their projections for next year’s purchase financing.
On the refinance side, Fannie lifted the full-year 2014 forecast by $0.011 trillion to $0.423 trillion, while next year’s refinance outlook increased by $0.016 trillion to $0.293 trillion.
Refinance share is expected to be 37 percent in the current year and 26 percent in 2015.
Adjustable-rate mortgages are expected to account for 10 percent of total 2014 activity and 14 percent of next year’s originations.
Fannie has revised its estimates of total mortgages outstanding for 2012 through 2015.
This year’s estimate of mortgages outstanding now stands at $9.958 trillion, including $9.274 trillion in first mortgages.
Next year’s estimate of outstandings is $10.088, including $9.401 trillion in first liens.
