Freddie Mac Expect Less Refi Activity in 2017

first_img October 20, 2016 663 Views Freddie Mac Housing Market U.S. Economy 2016-10-20 Seth Welborn Freddie Mac: Expect Less Refi Activity in 2017 in Daily Dose, Data, Featured, Newscenter_img (Editor’s note: For more on this topic, see the cover story in the forthcoming November issue of MReport magazine which covers the possible end of the refi boom more in-depth)By Ryan SchuetteMortgage markets are doing well, but don’t take anything for granted—especially with looming declines in refinance originations and less certainty around the broader economy.That’s the synopsis of an economic forecast out from Freddie Mac on Thursday. According to the GSE, $2 trillion in total originations expected this year could dip to about $1.7 trillion in 2017.Part of that is due to a cool-off in refinance originations activity. Freddie Mac predicted a steep decline in this sector—by some 41 percent, a fall from $1 trillion in refinance activity to about $600 billion.The expected declines also owe to unpredictable interest-rate moves from the Federal Reserve and the ripple effect of a post-Brexit world economy, according to the analysis.”As the economy sputters along a little bit faster than stall speed, the U.S. housing market continues to be a bright spot, though there’s less room to run than in the prior few years,” Sean Becketti, chief economist for Freddie Mac, said in a statement. “Unlike new home sales, existing home sales have nearly recovered back to pre-recession norms.“However, worldwide economic growth is weak and its prospects have gotten worse. This may all sound familiar because we’ve been here before,” Becketti added.According to the analysis, the economy should chug along at 1.9 percent year-over-year, with 1.6 percent in GDP growth in 2016. The 30-year fixed-interest mortgage could very well average 3.9 percent fourth quarter next year.The GSE also predicted that total home sales will feel a drag, with an uptick in new single-family housing construction lifting that count only slightly higher to 6.16 million, marginally better than 6.04 million reported in 2016.“[W]e see new home sales improving some next year driven by increases in new single-family housing construction which will push total home sales slightly higher,” Becketti said. Sharelast_img

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