Freddie Forecasts 8.5% Origination Drop in '07

Freddie Mac economists expect mortgage originations to decline by 8.5% this year due to fewer home sales, slower growth in home prices, and rising interest rates."We now forecast total mortgage originations in 2007 to hit 2.75 trillion," down from 2.92 trillion last year, they said. Freddie Mac economists also estimate that new and existing single-family homes will decline by 6.7% this year, from 6.76 million in 2006 to 6.28 million. (Freddie Mac's home sales numbers do not include condominiums.) Meanwhile, the level of refinancings is expected to hit a seven-year low. Freddie's latest forecast projects that refinancings will constitute 42% of mortgage originations in 2007, down from 49% last year. The government-sponsored enterprise can be found online at http://www.freddiemac.com.