Purchase financing is forecasted to increase next year. But rising interest rates are expected to put a bigger dent in refinances.
Residential single-family loan originations by all U.S. home lenders are expected to nearly reach $1.6 trillion for all of this year.
But business is then expected to slow during next year, with approximately $1.44 trillion in 2016
mortgage production projected.
That is according to CoreLogic Inc.’s 2016 Outlook for Housing.
Dr. Frank Nothaft, Chief Economist for CoreLogic, noted in the report that fixed rates are forecasted to increase around 50 basis points between now and the end of next year.
The increase in rates is based on U.S. economic growth of between two percent and three percent.
The projected 10 percent year-over-year decline in originations is due to a forecasted 34 percent drop in refinances — which will be negatively impacted by the higher rates.
But purchase financing and home-equity lending is predicted to increase 10 percent.
