Mortgage bankers have grown more optimistic in their projections for home purchase lending in 2017 and next year. All of this year’s improvement came in the final quarter.
Residential lending activity during the fourth quarter is forecasted to reach $393 billion. Business is then expected to drop to $355 billion in the first-three months of next year.
But during the second-quarter 2018, mortgage originations — including loans to finance a home purchase and refinances — are projected to soar to $445 billion.
That is according to the Mortgage Bankers Association’s MBA Mortgage Finance Forecast.
Purchase-money lending is predicted to fall from $262 billion this quarter to $237 billion in the first-quarter 2018. MBA bolstered its current-quarter outlook from $240 billion in last month’s forecast and lifted its first-quarter 2018 outlook from $230 billion in the first-three months of next year.
Refinance originations will decline from $153 billion in the three months concluding at year-end 2017 to $125 billion the following quarter, according to the report.
The outlook had overall annual loan originations falling from $1.688 trillion this year to $1.597 trillion in 2018 and $1.640 trillion the following year. In 2020, $1.712 trillion in mortgage originations are estimated.
Purchase financing is predicted to grow from $1.110 trillion in 2017 to $1.184 trillion next year, $1.245 trillion in 2018 and $1.317 trillion the following year. The current year’s forecast was bumped from $1.088 trillion, the subsequent period’s expectations were up from $1.167 trillion.
MBA has refinance production at $0.600 trillion this year, $0.430 trillion a year later and $0.395 trillion each of 2019 and 2020. Refinance share will sink from 36 percent in 2017 to 27 percent a year later, 24 percent in 2019 and 23 percent in 2020.
Loans secured by one-to-four unit residential properties will consistently expand each year, growing from $10.010 trillion at the end of next month to $10.370 trillion as of the conclusion of 2018, $10.760 trillion at year-end 2019, and $11.130 trillion as of Dec. 31, 2020.
