Single-family mortgage production this year is expected to be 3% higher than anticipated last month, according to Fannie Mae, which revised its estimates Thursday based partly on a stronger housing outlook.
“The upward revisions to our home sales forecast and 2020 home price path led to an increase in our forecast of purchase mortgage originations to $1.28 trillion and $1.29 trillion, respectively,” Fannie Mae’s macroeconomic forecast team said in their latest monthly report.
Last month, Fannie anticipated purchase originations would total $1.27 trillion this year and next.
While the government-sponsored enterprise’s most recent 2019 estimate represents an upward revision of less than 1% from what it previously forecast in September, it’s significant in that it suggests the purchase market that accounts for 63% of the market’s volume remains strong.
While there has been concern about the housing market nearing its peak, recent indicators such as single-family starts and the National Association of Home Builders/Wells Fargo Housing Market Index suggest the market is still thriving.
Fannie also is more optimistic about gains from the refinance market this year, having increased its 2019 estimate in the past month by nearly 9% to $761 billion. That boosts the GSE’s total estimate for the year above $2 trillion. Home mortgage originations haven’t cracked the $2 trillion mark since 2016.
But both GSEs expect that single-family home mortgage originations will drop back below $2 trillion next year.