Mortgage Origination Forecast Bolstered

Mortgage production by all U.S. lenders is expected to climb from $321 billion in the first quarter to $367 billion during the current three-month period then settle back to $347 billion in the third quarter.

The outlook improved from last month, when originations were expected to increase from $272 billion to $329 billion in the second quarter then rise to $333 billion.

The latest projections were made in Fannie Mae’s Housing Forecast: April 2015.

Fannie lifted its estimate of first-quarter purchase financing to $133 billion from $119 billion forecasted last month. The second-quarter projection increased to $208 billion from $192 billion, and $211 billion is now expected in the third quarter versus the $195 billion expected in March.

The refinance forecast grew to $188 billion for the first quarter from the previous projection of $153 billion, while this quarter’s outlook increased to $159 billion from $138 billion. But the following period’s
expected amount slipped to $136 billion from $138 billion.

Full-year 2015 total originations are now expected to come in at $1.351 trillion compared to the $1.239 trillion in last month’s outlook. Next year’s projection was lifted to $1.231 trillion from $1.206 trillion.

Fannie increased
its prediction for this year’s purchase production to $0.742 trillion from $0.684 trillion, and the 2016 outlook grew to $0.798 trillion from $0.781 trillion.

The 2015 refinance outlook grew to $0.609 trillion from $0.554 trillion in the previous forecast, and next year’s increased to $0.433 trillion from $0.424 trillion.

Refinance share is expected to go from 45 percent this year to 35 percent in 2016.

Fannie has total outstanding mortgages
growing from $9.862 trillion in 2014 to $10.031 trillion this year then expanding to $10.270 trillion in 2016.

Adjustable-rate mortgages are expected to account for
8 percent of this year’s originations and 9 percent of next year’s.