The Federal Home Loan Mortgage Corp. raised its expectations for current-quarter originations, though the bump came at the expense of the prior period.
In the fourth-quarter 2016, Freddie Mac predicts that U.S. one-to-four family originations will total $490 billion, plunging from $590 billion in the third quarter.
Home lending is then expected to sink to $300 billion during the first-three months of next year and bounce up to $450 billion in the second-quarter 2017.
The predictions were made in
the secondary lender’s December 2016 Economic & Housing Market Forecast .
Freddie reduced its third-quarter 2016 estimate from $595 billion in last month’s outlook, while the fourth-quarter projection was raised from $485 billion.
Based on expected refinance share, refinance production is expected to reach $230 billion in the final-three months of this year then plummet to $105 billion three months later. Freddie lifted the fourth-quarter forecast from $228 billion in the November report.
Expectations are that purchase financing will drop from $260 billion this quarter to $195 billion in the first-quarter 2017. The fourth-quarter outlook was raised from $257 billion in the prior-month forecast.
Full-year 2016 overall originations are expected to come in at $2.000 trillion then tumble to $1.505 trillion the following year and $1.500 trillion in 2018.
Refinance volume is expected to sink from $0.940 trillion this year to $0.421 trillion in 2017 and $0.300 trillion a year later.
Refinance share is projected to thin from 47 percent in 2016 to 28 percent next year and 20 percent in 2018.
This year’s purchase financing is expected to total $1.060 trillion. Purchase-money lending is then predicted to increase to $1.084 trillion in 2017 and $1.200 trillion a year later.
Based on McLean, Virginia-based Freddie’s
estimates for combined Federal Housing Administration and Department of Veterans Affairs originations, government share is projected to rise from 21.7 percent in 2016 to 24.5 percent next year then fall to 21.7 percent in 2018.
