The outlook for this year’s refinance production has brightened considerably. Next year’s refinance forecast was also raised — though at the expense of projected purchase financing.
Mortgage bankers are expected to originate $345 billion in home loans during the three months ending March 31.
Business is then projected to rise to $375 billion in the second quarter then retreat to $325 billion during the following three-month period.
The predictions increased from last month’s outlook from Freddie Mac, when total business was expected to go from $320 billion in the first quarter to $350 billion then settle back to $300 billion in the third quarter.
Freddie raised its first-quarter refinance forecast to $166 billion from $144 billion, while the second-quarter projection increased to $143 billion from $123 billion.
Refinance volume was determined using Freddie’s projected refinance share.
Also increasing was the purchase financing outlook, to $179 billion from $176 billion for the first quarter and to $233 billion from $228 billion three months later.
For all 12 months of 2015, Freddie has total mortgage production at $1.300 trillion, more than the $1.200 trillion expected in last month’s report.
Next year’s overall outlook was unchanged at $1.275 trillion.
This year’s refinance volume is expected to be $0.520 trillion, more than the $0.420 trillion expected last month. Next year’ refinance forecast increased to $0.383 trillion from $0.306 trillion.
Refinance share is projected at 40 percent in 2015 and 30 percent in 2016.
Freddie left expected purchase production
at $0.780 trillion for this year but cut next year’s forecast to $0.893 trillion from $0.969 trillion.
Government mortgage business is expected to account for 20 percent of both 2015’s and 2016’s overall volume, putting 2015 government production at $0.260 trillion and next year’s activity at $0.255 trillion.
Adjustable-rate mortgages are expected to account for
11 percent of this year’s activity and 15 percent of 2016 production.
