The forecast for mortgage originations for next year has been modestly raised. Meanwhile, this year’s refinance outlook grew at the expense of projected home purchase financing.
From Oct. 1 through year-end, American mortgage firms are expected to originate $428 billion in loans. Business it then expected to sink to $330 billion in the first-three months of next year.
But a strong recovery is expected for the second quarter of 2018, when residential loan production is projected to shoot up to $490 billion.
Freddie Mac, which reported the outlook Monday in its November 2017 Economic & Housing Market Forecast, raised its fourth-quarter expectations from $413 billion predicted in it October forecast.
Based on Freddie’s expected refinance share, refinance production will fall from an upwardly revised $137 billion in the fourth quarter to $99 billion three months later.
The current-quarter purchase financing outlook rose to $291 billion from $281 billion expected in last month’s forecast. The first-quarter 2018 purchase projection is $231 billion.
This year is expected to finish with $1.800 trillion in total originations. Lending will then fall to $1.720 trillion in 2018, more than the $1.695 trillion predicted in the last report. The following year’s total is $1.770 trillion.
Refinance share is expected to thin from 34 percent to a quarter next year and 23 percent in 2019.
That will put total refinance originations at $0.612 trillion in 2017, $0.430 trillion next year and $0.407 trillion in 2019. This year’s refinance forecast grew from $0.594 billion, and next year’s inched up from $0.424 billion.
That left $1.188 trillion for purchase-money mortgages this year, $1.290 trillion in 2018 and $1.363 trillion in 2019. The current-year forecast was trimmed from $1.206 trillion last month. But the 2018 prediction was raised from $1.271 trillion expected in the last report.
Government share is expected to thin from 23.6 percent in 2017 to 23.0 percent next year and 22.9 percent a year later.
