After a strong 2012, single-family originations will decline by about 15% next year as refinancings wane and an anticipated increase in home purchases falls short of filling the void, according to a new forecast from Freddie Mac.
Freddie Mac’s chief economist Frank Nothaft is predicting that single-family fundings will total $1.7 trillion in 2013, compared to an estimated $2 trillion this year.
According to figures compiled by National Mortgage News and the Quarterly Data Report, lenders are on track to originate $1.8 trillion in 2012, a figure that is a little lower than Freddie’s number for this year.
Freddie is forecasting that in 2013 refinancings will make up 60% of originations, compared to 75% in 2012.
He noted that many borrowers have already locked in low rates and in 2013 rates will be higher, removing a key incentive to refinance.
Nevertheless, rates will remain below 4%. “This means homebuyer affordability should remain very high in 2013 for those potential buyers with good credit history, stable income and sufficient savings,” Nothaft says in his December Economic & Housing Market Outlook report.
Separately, a new Fannie Mae survey found that in November, 23% of home owners believe now is a good time to sell. The measurement is five percentage points higher than a reading taken in October. It marks the highest measurement since June 2010 when the GSE started the survey.
In addition, 51% of the respondents said it is easier for them to obtain a mortgage, up from 41% in November 2011.
“This growing confidence in a housing recovery, in addition to other factors, may reinforce growing consumer optimism regarding the improving direction of the general economy,” Fannie chief economist Doug Duncan said.