An increase in refinance share and stronger Federal Housing Administration activity are accompanying an overall increase in quarterly loan fundings.
Home-loan production will reach $369 billion in the third quarter, better than $344 billion three months earlier, Freddie Mac projected in its August economic outlook.
In the third-quarter 2009, residential originations were $517 billion.
The third-quarter 2010 forecast included $100 billion in government business, up from $87 billion in the prior period. Conventional activity, meanwhile, is projected to come in at $269 billion, up from $257 billion.
During all of this year, Freddie forecasts $1.400 trillion in home loan volume, lower than $2.000 trillion last year. In 2011, $1.400 trillion in production is predicted.
The share of closings that will be adjustable-rate is expected to remain at 6 percent through the end of this year then rise to 10 percent by the end of next year.
Refinances are expected to represent 78 percent of this quarter’s originations, higher than the second quarter’s 75 percent and the 64 percent share predicted for the fourth quarter.
