News Column

Fannie Mae Raises 2013 Origination Outlook

June 14, 2013

This year's forecast from Fannie Mae for primary residential originations has been raised by $76 billion, though the improvement came at the expense of the 2014 outlook. On just purchase financing, annual expectations improved across-the-board.

The secondary lender expects that mortgage originations will jump to $573 billion in the second quarter from $460 billion in the first quarter.

Fannie adjusted its outlook from last month, when it predicted that originations would rise to $519 billion from $458 billion.

The third-quarter production forecast was lifted to $399 billion from $374 billion predicted in May, but the fourth-quarter forecast was cut to $302 billion from $309 billion.

Fannie projects that refinance volume will climb from $352 billion to $397 billion this quarter then fall back to $224 billion in the third quarter. Last month's outlook had refinance volume falling from $350 billion to $344 billion then sinking in the third quarter to $201 billion.

The current quarter's expected refinance share was pushed up to 69 percent from 66 percent, and the third-quarter share was lifted to 56 percent from 54 percent.

Purchase financing volume is expected to climb from $108 billion in the first quarter to $177 billion in the second quarter then slip to $175 billion. That outlook was slightly stronger than last month's forecast that purchase production would jump from $107 billion to $175 billion then dip to $173 billion in the third quarter.

Fannie increased its estimate of 2012 overall production to $2.027 trillion from the $1.924 trillion estimated last month. This year's expected production was raised to $1.735 trillion from $1.659 trillion.

But the secondary lender cut its 2014 forecast to $1.101 trillion from $1.143 trillion.

Last year's estimated refinances were increased to $1.475 trillion from $1.393 trillion, while this year's refinance outlook expanded to $1.121 trillion from $1.052 trillion. But Fannie cut its expectations for 2014 refinances to $0.375 trillion from last month's forecast of $0.426 trillion.

The refinance share was revised to 73 percent for 2012, 65 percent for this year and 34 percent for 2014.

The Washington, D.C.-based company now estimates that 2012 purchase financing totaled $0.552 trillion last year versus the $0.531 trillion estimated in April. The 2013 purchase forecast was raised to $0.613 trillion from $0.608 trillion, and next year's outlook increased to $0.726 trillion from $0.717 trillion.

Residential loans outstanding are expected to grow from $9.925 trillion in 2012 to $9.953 trillion this year. Next year, outstandings are expected to increase to $10.147 trillion.

First liens accounted for $9.156 trillion of last year's outstandings, $9.214 trillion of this year's total and $9.414 trillion of the 2014 amount.



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Source: Copyright 1MG 2013

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