Estimated 2016 originations of loan utilized to finance a home purchase were raised in the latest economic outlook. But the increase came at the expense of estimated refinance production.
Mortgage loan production by all U.S. lenders is expected to reach $413 billion during the concluding three months of this year.
Included in the fourth-quarter projection is an estimated $132 billion in refinance transactions and $281 billion in purchase-money lending.
Freddie Mac. presented the projections in its October 2017 Economic & Housing Market Forecast.
Refinance and purchase production numbers were based on refinance share reported by Freddie.
For all of this year, Freddie has mortgage originations amounting to $1.800 trillion then receding to $1.695 trillion in 2018.
The secondary lender lowered its estimate of 2016 refinance production to $0.999 trillion from $1.020 trillion predicted in September’s report. No change was made to expected refinances of $0.594 trillion during 2017 and $0.424 trillion next year.
Refinance share is expected to go from 47 percent last year to a third in 2017 and a quarter next year.
Freddie lifted last year’s purchase-money estimate to
$1.126 trillion from $1.105 trillion. This year’s purchase financing forecast was left at $1.206 trillion, and next year’s was unchanged at $1.271 trillion.
Mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs are predicted to account for 23.6 percent of current-year production and 21.7 percent of next year’s lending volume.
