Projected Q3 Mortgage Lending Most in Nearly 4 Yrs

Including refinances and purchase-money production, home-lending volume is expected to reach $595 billion during the third quarter of this year.

Originations are then expected to decline to $485 billion during the final-three months of 2016 and fall further, to $340 billion, in the first-quarter 2017.

Historical data from Freddie Mac, which made the latest predictions in its
September 2016 Economic & Housing Market Forecast, indicate that third-quarter 2016 volume is the most since the fourth-quarter 2012, when an estimated $600 billion was closed by U.S. lenders.

Based on Freddie’s estimate of refinance share, mortgage refinances are projected at $298 billion for the third-quarter 2016 — the most since the second-quarter 2013’s estimated $364 billion. Fourth-quarter refinance production is expected to drop to $228 billion.

Freddie’s data indicates purchase financing will total $298 billion this quarter — the most since Mortgage Daily started calculating quarterly purchase-money production in the first-quarter 2012 (and likely during any quarter since the 2008 financial crisis). Purchase volume is projected to fall to $257 billion in the fourth quarter.

For all of this year, total originations are expected to be $2.000 trillion — the most since 2012’s estimated $2.122 trillion. In 2017, mortgage production is expected to decline to $1.650 trillion.

Refinances will make up $1.000 trillion of 2016’s total and $0.594 trillion on next year’s activity.

Refinance share is predicted to fall from 50 percent in the current year to 36 percent in 2017.

Purchase financing, though, is expected to rise from $1.000 trillion in 2016 to $1.056 trillion a year later. The last time annual purchase-money production was this strong was in 2007, when it was an estimated $1.240 trillion.