While refinance volume and share are expected to diminish between this year and 2017, government share and purchases are predicted to rise.
The nation’s residential-lending volume, including refinances and purchase financing, is forecasted to finish the second quarter at $396 billion.
Mortgage originations are then expected to decline to $347 billion in the following quarter then fall further to $316 billion in the fourth quarter.
The predictions were made by Freddie Mac in its
June 2016 Economic & Housing Market Forecast.
There were no changes from Freddie’s outlook in May.
Based on Freddie’s expected refinance share, refinance production is expected to account for $212 billion of current-quarter volume and $171 billion of third-quarter activity.
Freddie’s data indicate that refinance volume will recede each quarter through the end of next year.
However, economists at the secondary lender are likely to revise their refinance forecasts higher in the next outlook as a result of plummeting mortgage rates following Great Britain’s vote to exit the European Union.
Purchase production is projected to make up $293 billion of second-quarter activity then slip to $279 billion three months later.
Overall full-year 2016 mortgage originations are expected
to finished the year at $1.725 trillion then retreat to $1.460 trillion next year.
This year’s total includes $0.707 trillion in refinances, while the 2017 total includes just $0.350 trillion.
Refinance share is predicted to plummet from 41 percent in 2016 to just 24 percent the following year.
Purchase-money activity, however, is forecasted to rise from $1.018 trillion this year to $1.110 trillion in 2017.
Based on Freddie’s projection of Federal Housing Administration and Department of Veterans Affairs originations of $0.393 trillion in 2016 and $0.369 trillion next year, government share will go from 22.8 percent during the current year to 25.3 percent in 2017.
