Forecasted financing of residential property purchases has been reduced by more than $60 billion for this year and last year. There was an improvement, though, for refinances.
The origination of loans to refinance an existing mortgage or to finance a home purchase is expected to amount to $454 billion during the third quarter.
Aggregate mortgage production by all originators in the country is then expected to sink to $372 billion during the final-three months of this year.
Those predictions were made by Freddie Mac in its August 2018 Economic & Housing Market Forecast.
The current-quarter outlook was reduced from $464 billion projected in last month’s forecast, while the fourth-quarter prediction fell from $384 billion.
Estimated refinance originations based on Freddie’s reported refinance share is expected to reach $127 billion in the third quarter and fall to $89 billion three months later.
Purchase financing expected for this quarter was cut to $327 billion from $339 predicted last month. The fourth-quarter purchase forecast was lowered to $283 billion from $296 billion.
On a four-quarter basis, last year’s estimated originations were lowered to $1.807 trillion from $1.818 billion a month earlier, while the 2018 forecast fell to $1.655 trillion from $1.686 trillion. Next year’s home lending is expected to reach $1.690 trillion.
Freddie raised its 2017 refinance estimate to $0.669 trillion from $0.654 trillion. This year’s forecast was bumped to $0.497 trillion from $0.489 trillion, and next year’s refinances are expected to total $0.406 trillion.
Refinance share is expected to thin from 37 percent last year to 30 percent in 2018 and 24 percent next year.
The prediction for last year’ purchase-money lending was cut to $1.138 trillion from $1.164 trillion, while the 2018 forecast fell to $1.159 trillion from $1.197 trillion.
FHA and VA mortgage production is estimated to account for
23.7 percent of 2017’s total originations. Government share is forecasted at 23.9 percent for this year and 23.5 percent in 2019.
