A day after Freddie Mac increased its forecast of mortgage originations, mortgage bankers cut their projection.
Second-quarter home-loan production by U.S. lenders is expected to come in at $290 billion, the Mortgage Bankers Association predicted in a report Thursday. The projection was lowered from $295 billion in last month’s forecast.
MBA has third-quarter fundings falling to $252 billion, also scaling back its outlook from last month’s prediction of $263 billion.
The lowered outlook was the result of purchase activity, with the prediction for second-quarter business lowered to $104 billion from $118 estimated last month. The third-quarter purchase-money outlook was cut to $113 billion from $132 billion
But the Washington, D.C.-based trade group raised expectations for second- and third-quarter refinance volume by a combined $9 billion.
Projected full-year 2011 production of refinances and purchase-money mortgages was cut to $1.025 trillion from last month’s estimate of $1.050 trillion. Next year’s production outlook was slashed to $0.961 trillion from $1.025 trillion forecasted in May.
This year’s purchase estimate was scaled back to $432 billion from $488 billion.
Freddie’s 2011 origination forecast released yesterday was increased to $1.2 trillion from its projection of $1.1 trillion a month earlier.
No change was noted in MBA’s expectation that the share of adjustable-rate business will remain at 7 percent during each quarter this year.
