The second half of 2012 continues to look better for mortgage bankers, with juiced-up refinance demand fueling an increased forecast.
Total one- to four-family financing is projected to climb to $412 this quarter from $372 billion in residential loans originated during the second quarter. Fourth-quarter fundings are forecasted to settle back to $319 billion.
Last month’s Mortgage Finance Forecast called for home-loan production to fall from just $371 billion in the third quarter to $302 billion during the final three months of 2012.
The Mortgage Bankers Association, which produced the outlook, said refinance volume is expected to decline from $305 billion in the third quarter to $207 billion. The previous outlook had refinances declining from $275 billion to $196 billion in the fourth quarter.
Refinance share, which has been around three-quarters for most of this year, is projected to fall below two thirds in the fourth quarter, to one half three months later and spend the rest of 2012 at less than half.
MBA predicts purchase production will drop from $74 billion to $65 billion in the fourth quarter. The trade group didn’t vary from last month’s purchase projection.
From the current quarter until the first quarter of next year, MBA has adjustable-rate mortgage share at 6 percent.
Improved expectations for the second half pushed up the annual origination forecast to $1.466 trillion from last month’s prediction of $1.408 billion.
But MBA left the 2013 forecast unchanged at $1.043 trillion.
