Interest rates might be on the rise, but that didn’t stop mortgage bankers from raising their outlook for this year’s residential loan originations. A lower forecast for refinances was more than offset by raised expectations for purchase financing.
Home loan production is predicted to fall from $494 billion in the second quarter to $359 billion this quarter then retreat further to $247 billion during the final three months of 2013.
Last month’s projection was for originations to fall to $352 billion in the third quarter and $244 billion in the fourth quarter.
While there was no change in the Mortgage Bankers Association’s overall estimate for second-quarter activity, the refinance share was cut to 64 percent from 67 percent estimated in June.
MBAÂ increased its third-quarter refinance projection to $183 billion from the $172 billion expected last month, while the fourth-quarter refinance outlook slipped to $111 billion from $112 billion.
MBA’s estimate of second-quarter purchase originations increased to $178 billion from $163 billion, while the third-quarter forecast was trimmed to $176 billion from $180 billion. The trade group lifted its fourth-quarter purchase outlook to $136 billion from $132 billion.
The full-year 2013 forecast for all mortgage originations now sits at $1.582 trillion versus the $1.572 trillion previously projected.
Next year’s overall outlook was unchanged at $1.091 trillion.
With a 61 percent refinance share expected this year, refinance originations are pegged at $0.967 trillion, down from last month’s prediction of $0.972 trillion.
The refinance share for 2014 is expected to be just 36 percent, leaving next year’s projected refinances at $0.388 trillion, the same as in June’s outlook.
Purchase financing is expected to total $0.615 trillion in 2013, more than the $0.600 trillion previously forecasted.
Next year’s purchase production is projected to be $0.703 trillion, the same as MBA expected in its prior forecast.
