The mortgage markets will continue to be busy in the coming year, with overall production slipping by just 5%, according to the latest Freddie Mac projections.While the refinancing boom is "clearly behind us," the purchase-money sector should more than hold its own, Freddie Mac chief economist Frank Nothaft said at a National Press Club briefing. Total single-family home sales will slide a bit, too, from 7.28 million to 7.04 million over the same period, Mr. Nothaft predicted. "We can't have records every single year," he lamented. But that's still enough sales to sustain the mortgage market well into the first half of 2007. Overall, Freddie Mac's latest forecast for one- to four-family loan originations calls for a gradual decline, from $755 billion in the third quarter of 2005 to $714 billion for the same period a year from now. Further out, projections call for production to slide under the $600 billion level by the first quarter of 2007 before bouncing up again to $669 billion in the next quarter. Also over, according to the economist, is the "remarkable run" of unusually low mortgage rates as well as double-digit gains in house prices. "It's unrealistic to expect appreciation to remain at such phenomenal levels," he said. "We'll still see appreciation, but it will be nowhere near the rates of the last few years."

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