Economists at the nation’s largest mortgage company have lowered their forecast for refinances both this year and next year while bolstering their purchase outlook.
Overall second-quarter home-loan production, including purchase financing and refinancing,
is estimated to have reached $467 billion, an increase from the $442 billion forecasted last month by Fannie Mae.
The third-quarter outlook, however, fell to $353 billion from $365 billion, and the fourth-quarter projection was lowered to $320 billion from $331 billion.
Fannie made the latest predictions in its Housing Forecast: July 2015.
The secondary lender lifted its second-quarter estimate of purchase financing to $232 billion from $227 billion in the last report. Third-quarter purchases are now expected to reach $215 billion versus the $209 billion previously expected, while the following quarter is expected to bring in $192 billion in purchase transactions, up $4 billion.
At the same time, the second-quarter outlook for refinances
jumped to $235 billion from $215 billion, though the third-quarter forecast fell to $138 billion from $156 billion, and the fourth-quarter outlook slid to $128 billion from $143 billion.
Full-year 2015 overall production is now expected to reach $1.464 trillion, up $0.003 trillion from the last outlook.
Next year’s origination outlook fell, though, to $1.171 trillion from $1.179 trillion.
Fannie expects $0.775 trillion of this year’s business to be purchase financing, more than the $0.760 trillion expected in the last report. The 2016 purchase outlook was raised to $0.810 trillion from $0.799 trillion.
The 2015 refinance forecast was lowered to $0.689 trillion from $0.701 trillion, while next year’s refinance outlook fell to $0.362 trillion from $0.381 trillion.
Fannie has refinance share going from 47 percent this year to 31 percent in 2016.
