The Mortgage Bankers Association said it expects originations in the second half of the year to total $606 billion, up from the $527 billion it had forecast at the beginning of the year.
This is down considerably from an estimated $976 billion in originations during the first half of the year.
While the MBA increased its projections for purchase loans by $13 billion to $312 billion, the bulk of the increase is from loans which started the refinance process in the second quarter that will close in the third quarter.
At May’s National Secondary Mortgage Market Conference, MBA economists
“As we said at the beginning of the year, the big unknown for origination volumes was the timing of the market reaction to any statements from Federal Reserve officials regarding the phasing out of quantitative easing and the impact on refinance volumes. While the magnitude of the rate increase was larger than we had forecast, the timing of the increase and the impact on refinance volumes was pretty much in line with what we had expected,” said Jay Brinkmann, MBA’s chief economist.
“Part of the reason for the increase relative to our prior forecast for refinance originations for the third quarter is that lenders reported to us a jump in pull-through rates as a result of the rate jump. Loan applicants were doing whatever they could to protect their locked-in rates so the applications volume at the end of the second quarter translated into a higher number of fundings in July.”
