The latest economic projection has residential loan originations during the final-three months of last year $30 billion higher than previously thought.
U.S. mortgage production is expected to decrease from $478 billion during the fourth-quarter 2017 to $335 billion during the first-quarter of this year.
Home-lending business, including refinances and purchase financing, is forecasted to jump to $495 billion the following three months and ascend further, to $500 billion, in the third quarter.
That outlook was presented by Freddie Mac in its February 2018 Economic & Housing Market Forecast. Freddie raised its fourth-quarter estimate of volume from $448 billion in its January report.
Based on an analysis of Freddie’s total originations and refinance share, Mortgage Daily estimates that refinance originations will sink from $172 billion in the fourth-quarter 2017 to
$101 billion this quarter then partially recover to $124 billion in the second quarter. The estimate for the final quarter of 2017 was raised from $161 billion last month.
Freddie’s data indicate that loans to finance a home purchase made up $306 billion of originations from Oct. 1, 2017, through year-end 2017, more than $287 billion previously estimated. Volume is expected to reach $235 billion in the current quarter and $371 billion in the second quarter.
Freddie has overall annual originations falling from $1.85 trillion last year to $1.74 trillion
in 2018 then climbing to $1.78 billion next year. The 2017 estimate was raised from $1.82 trillion in the prior-month forecast. Volume will then ascend to $1.78 trillion in 2019.
The 2017 refinance estimate was increased to $0.67 trillion from $0.66 trillion. Refinance production is then expected to tumble to $0.44 trillion this year and $0.41 trillion in 2019.
Refinance share is projected at 25 percent for 2018 and 23 percent the following year.
Last year’s purchase-money estimate was lifted to $1.18 trillion from $1.17 trillion. Purchase volume is expected to grow to $1.31 trillion in 2018 and $1.37 trillion a year later.
Government share, based on Freddie’s FHA/VA numbers, was 23.1 percent in 2017 and will be the same in 2018, while the share will thin to 22.9 percent in 2019.
