Home lenders cut their outlook for the volume of home purchases expected to be financed this year. But an increase in projected refinance production was enough to push the overall forecast higher.
Residential lenders are expected to originate $320 billion during the first three months of 2012.
The prediction was made by the Mortgage Bankers Association, which last month estimated that first quarter production would be only $302 billion.
The Second Quarter forecast was lifted to $262 billion from $257 billion.
MBA has purchase activity climbing to $102 billion in the second quarter from $77 billion this quarter as refinance production plummets to $160 billion from $243 billion.
Refinance share is expected to exceed three quarters during the current three-month period then fall each quarter through the end of next year, when it will sit at less than a third.
The trade group, which is meeting in Orlando, Fla., for its annual servicing conference, said it expects full-year 2012 to fall to $1.026 trillion from $1.262 trillion last year. Next year’s forecasted originations are $1.028 trillion.
Just 4 percent of first-quarter production is expected to be adjustable-rate mortgages, the same as the fourth quarter. By the second quarter of next year, ARM share is predicted to rise to 7 percent — where it will stay for the rest of 2013.
