The nation’s mortgage bankers have scaled back their expectations, yet again, for mortgage originations to finance home purchases.
Home lending volume, including purchases and refinances, is forecasted to drop from $274 billion during the current quarter to $240 billion in the fourth quarter then rise to $271 billion during the first three months of next year.
That residential loan origination forecast was left unchanged from the previous month’s mortgage business outlook.
The latest prediction was made in the MBA Mortgage Finance Forecast for September from the Mortgage Bankers Association.
Expectations are for refinance volume to fall from $115 billion in the current quarter to $103 billion in both the fourth-quarter 2014 and the first-quarter 2015. MBA lifted the fourth-quarter projection from $96 billion expected as of last month.
But the increased refinance outlook came at the expense of expected purchase activity. MBA predicts purchase volume will go from $159 billion to $137 billion in the fourth quarter then jump to $168 billion in the first-quarter 2015. Last month, MBA had fourth-quarter purchase originations reaching $144 billion.
MBA has consistently lowered either its quarterly or annual purchase outlook every month since last fall.
For all of 2014, total mortgage production is expected to reach $1.007 trillion, while next year’s originations are projected to be $1.130 trillion. There was no change from last month in the annual forecast.
But MBA lifted its 2014 refinance forecast to $0.438 trillion from $0.431 trillion and left the 2015 outlook at $0.401 trillion.
Refinance share is expected to fall from 44 percent this year to 36 percent next year.
The 2014 purchase financing forecast was lowered to $0.569 trillion from $0.576 trillion, and the 2015 projection was unchanged at $0.729 trillion.
