Economists at Fannie Mae have increased projections for originations this year and next year by more than $100 billion, and purchase financing got the biggest boost.
During just the second quarter, U.S. mortgage production — including purchase financing and refinancing — is forecasted by Fannie to come in at $474 billion.
Home-lending activity is then expected to descend to $441 billion during the following three-month period and decline to $381 billion in the final quarter of this year.
Fannie made the predictions in its
Housing Forecast: May 2016.
The current-quarter outlook increased from $444 billion in last month’s forecast, while the third-quarter projection was lifted from $413 billion and the fourth-quarter forecast rose from $367 billion.
The second-quarter purchase projection increased to $282 billion from $266 billion expected by Fannie in April. The third-quarter purchase outlook improved to $287 billion from $271 billion.
Fannie now has refinances totaling $192 billion this quarter versus the $178 billion expected last month. The
third-quarter refinance outlook grew to $154 billion from $142 billion.
Full-year 2016
total originations are predicted to be $1.648 trillion, more than the $1.555 trillion predicted in April. Next year’s outlook inched up to $1.451 trillion from $1.434 trillion
Fannie increased this year’s expected purchase financing to $1.002 trillion from $0.940 trillion expected last month.
The 2017 purchase financing forecast grew to $1.011 trillion from $0.994 trillion.
Refinances are now expected to represent $0.645 trillion of 2016 volume compared to $0.615 trillion in the prior-month forecast.
Next year’s refinance forecast was left at $0.440 trillion.
Projected refinance share
is 39 percent this year and 30 percent in 2017.
