The latest outlook for refinance originations has been lifted past $1 trillion for this year. The projection for purchase financing, however, was trimmed. Home loans outstanding are expected to resume growing next year.
Residential loan originations are forecasted to fall to $364 billion during the third quarter from the second quarter’s $451 billion.
While the latest outlook reflects a quarter-over-quarter decline, it was still better than last month — when home-loan production was projected to fall to $347 billion from $458 billion.
Fannie Mae, which released the forecast Tuesday, predicted that fourth-quarter originations will be $322 billion, more than the $297 billion expected in the July report.
Fannie increased projected refinance activity to $223 in the third quarter and $200 billion in the fourth quarter from the $204 billion and $176 billion respectively forecasted in July. The increase reflected a higher expected refinance share of 61 percent in the third quarter and 62 percent in the fourth quarter versus 59 percent projected for both quarter’s in the prior outlook.
But the prediction for third-quarter purchase financing was lowered to $141 billion from $144 billion in July’s outlook, while the fourth-quarter forecast was trimmed to $121 billion from $122 billion.
The full-year origination forecast was raised to $1.520 trillion for this year and $1.211 trillion in 2013 from the prior projection of $1.486 trillion in 2012 and $1.155 trillion next year.
This year’s refinance forecast increased to $1.020 trillion from the prior prediction of $0.981 trillion, while the purchase projection was lowered to $0.500 trillion from $0.505 trillion.
Fannie has total mortgages outstanding falling to $10.143 trillion this year from $10.268 trillion in 2011 then climbing to $10,313 trillion next year.
The first-mortgage portion of outstandings is expected to fall to $9.326 trillion in 2012 from last year’s $9.395 trillion. But in 2013, the total rises to $9.505 trillion.
