Freddie Mac raised its expectations for this year’s refinance production. Even the annual purchase financing outlook was nudged higher.
Home lending volume from all primary U.S. lenders is expected to fall from $505 billion this quarter to $450 billion in the third quarter.
Business is then expected to continue its slide, with production retreating to just $410 billion during the final three months of this year.
Economists at the McLean, Virginia-based company summarized their expectations in the
April 2016 Economic & Housing Market Forecast.
But Freddie increased its second-quarter estimate from $480 billion predicted last month.
The third-quarter projection rose from $435 billion, and the final quarter was up from $400 billion expected in March’s outlook.
Based on an analysis of refinance share and total origination volume, Mortgage Daily estimates that the second-quarter refinance forecast was boosted to $212 billion from $187 billion in the last forecast.
Third-quarter refinances are now expected to come in at $171 billion versus the $157 billion expected a month ago.
Projected purchase
production is at $293 billion and $279 billion for the second and third quarters, respectively.
Freddie expects overall annual mortgage originations to fall from $1.700 trillion this year to $1.460 trillion in 2017.
Last month’s forecast had 2016 production at $1.650 trillion.
Projected refinance production was
lifted to $0.680 trillion for this year from last month’s projection of $0.644 trillion. Refinances are still expected to come in at $0.350 trillion next year.
Refinance share is forecasted at 40 percent for 2016 and 24 percent for 2017.
The volume of loans used to finance the purchase of homes is expected to climb from $1.020 trillion this year to $1.110 trillion next year. The 2016 outlook improved from $1.007 trillion a month earlier.
Projected FHA/VA share is 22.1 percent in 2016 and 25.3 percent in 2017.
