For six consecutive months now, mortgage bankers have boosted their estimates of mortgage refinance volume for this year.
From April 1 through June 30 of this year, total U.S. residential loan originations are expected to amount to $510 billion.
Production is then projected to retreat to $460 billion in the third quarter and
decline to $343 billion in the final quarter of 2016.
That is according to
the MBA Mortgage Finance Forecast from the Mortgage Bankers Association.
The trade group
lifted its third-quarter outlook from $420 billion predicted last month, while the fourth-quarter projection grew from $328 billion.
Purchase financing is expected to account for $275 billion of the current quarter’s volume and $290 billion of third-quarter activity.
Another $235 billion of second-quarter originations will be from refinances. MBA has third-quarter refinance production at $170 billion, up from the $130 billion predicted last month.
The latest report has this year’s total originations at $1.663 trillion, more than the $1.608 trillion expected in the prior-month’s outlook. There was no change to the $1.383 trillion expected for 2017 or the $1.347 trillion anticipated in 2018 volume.
Purchase production is expected to go from $0.973 trillion in 2016 to $1.011 trillion next year and $1.046 trillion in 2018.
MBA increased this year’s forecast for refinances to $0.690 trillion from $0.635 trillion in the outlook a month earlier.
The Washington-based organization has increased expected 2016 refinance originations each month since
December 2015, when refinance production was expected to come in at just $0.415 trillion.
MBA left the 2017 refinance outlook at $0.372 trillion, and also made no changes to the $0.301 trillion in expected 2018 refinances expected.
Refinance share is projected to fall from 41 percent in 2016 to 27 percent next year and 22 percent in 2018.
