The latest economic forecast has quarterly originations for both refinance and purchase transactions higher than the last outlook. In addition, the projection for the entire first half of next year has been raised.
U.S. home-loan production during the fourth quarter is expected to come in at $362 billion. That’s an improvement from the $344 billion closed in the third quarter.
The outlook for all lenders was issued Friday by Fannie Mae.
The secondary lender increased its fourth-quarter projection from $351 billion last month while cutting third-quarter volume from the $355 billion forecasted in the previous report.
The fourth-quarter numbers included $270 billion in refinances, up from the prior forecast of $263 billion. Refinance share is expected to fall from 75 percent this quarter to 70 percent in the first three months of next year then down to half the following quarter.
The fourth-quarter forecast for loans to finance home purchases was raised to $91 billion from $88 billion.
Fannie also increased its projection for total first-half 2012 production to $539 billion from the $506 billion it predicted in last month’s outlook.
There was no change to the full-year 2011 projection of $1.302 trillion, but next year’s forecast was lifted to $0.988 trillion from $0.958 trillion. Fannie, however, lowered its expectations for 2013 business to $0.987 trillion from $1.007 trillion in the previous forecast.
Mortgages outstanding are projected to close out 2011 at $10.284 trillion, including $9.415 trillion in first liens. Next year is expected to finish with $10.117 trillion in total mortgages outstanding, including $9.296 trillion in first mortgages.
