The outlook for mortgage production from all U.S. lenders during 2014 and 2015 was reduced by $80 billion compared to last month’s forecast.
Home lending activity is expected to climb from $320 billion in the first quarter to $410 billion during the current three-month period. Third-quarter production is forecasted at $330 billion.
The outlook was scaled back from last month, when originations were projected to climb from $350 billion to $425 billion then retreat to $333 billion in the third quarter.
Freddie Mac made the most recent predictions in its April 2014 Economic and Housing Market Outlook.
The forecast for second-quarter refinance production, which was determined using Freddie’s refinance share, was lowered to $164 billion from $170 billion, while third-quarter refinances are now expected to come in at $109 billion versus the $110 billion expected last month.
Purchase financing is projected to decline from $246 billion in the second quarter to $221 billion three months later. Freddie previously predicted that purchase production would go from $255 billion to $223 billion.
During all 12 months of this year, total mortgage originations are forecasted to come in at $1.300 trillion, less than the $1.350 trillion Freddie expected in its prior outlook. Next year’s forecast was lowered to $1.150 trillion from $1.180 trillion.
Based on refinance share falling from 39 percent in 2014 to 20 percent in 2015, refinance originations are expected to go from $0.507 trillion to $0.230 trillion in 2015.
Purchase production is forecasted to climb from $0.793 trillion in 2014 to $0.920 trillion next year.
Freddie has Federal Housing Administration loans and Department of Veterans Affairs mortgages collectively accounting for 20.0 percent of this year’s total production and 21.0 percent of 2015 activity.
