The latest forecast for U.S. residential originations this year was lowered by $37 billion from last month’s forecast.
First-quarter residential fundings by U.S. lenders will be $321 billion, according to Fannie Mae’s Economics and Mortgage Market Analysis released today. Last month, the government-controlled enterprise projected $332 billion in first-quarter volume. It was the second consecutive month that production estimates were cut.
The latest first-quarter forecast was lower than $406 billion closed in the fourth quarter. Fannie predicts originations will climb to $345 billion during the current quarter then tumble to $291 billion by the fourth quarter.
For all of this year, home-loan production is projected to reach $1.277 trillion, significantly lower than the $1.922 trillion originated last year and less than the $1.314 predicted last month. Next year’s fundings are forecasted at $1.513 trillion — lower than the $1.582 trillion projected by Fannie in January.
The refinance share was estimated at nearly two-thirds for the first quarter, higher than 60 percent in the fourth quarter. But the second-quarter 2010 refinance share is projected to fall to 41 percent.
The Washington, D.C.-based company expects the 30-year fixed-rate mortgage to average 5.17 percent this quarter, up from the first quarter’s 5.00 percent. The 30-year is expected to climb to 5.81 percent by the end of next year.
The one-year adjustable-rate mortgage is projected to rise to 4.36 percent this quarter from 4.25 percent. The one-year is forecasted to exceed 5 percent by the end of 2011. Conventional ARM share of applications is expected to stay at 5 percent this quarter then climb to 10 percent by the end of the year.
U.S. single-family mortgages outstanding finished the first quarter at an estimated $10.716 trillion, lower than $10.786 trillion outstanding at the end of last year. Outstandings were $10.987 trillion a year ago.
