Although the volume of purchase-money lending is forecasted to increase this year, it won’t be enough to offset the projected decline in refinances.
Overall residential loan originations are expected retreat from an estimated $1.850 trillion in 2016 to $1.557 trillion during all 12 months of this year.
Included in last year’s total is an estimated $0.947 trillion in loans to finance a home purchase. Purchase financing is projected to rise to $1.025 trillion in 2017.
The predictions were made in the 2017 Mortgage Market Outlook Executive Overview Report from iEmergent.
The expected growth in purchase-money production
is due to good economic conditions.
Refinance originations are forecasted to sink from an estimated
$0.903 trillion in 2016 to just $0.532 trillion this year. The decline is attributed to rising interest rates.
Refinance share is projected to fall from 49 percent last year to 34 percent in 2017.
“Credit availability has arguably been too tight and should further loosen in 2017,” iEmergent stated in the report.
Home-equity lending is expected to grow. But growth will be concentrated in the largest mortgage markets.
