The refinancing share of applications for the second quarter was pegged at 75%, up from 70% in Junes forecast, and the refinancing share of originations was pegged at 70%, up from 65% in the June economic outlook.
Estimates for the refi share in the third quarter are now 55% for apps and 50% for originations, as compared to 65% for apps and 55% for originations in the June forecast. Fourth-quarter estimates for July suggest on average a 45% refi app share and a 40% refi origination share, down from 50% and 45%.
Estimates for overall volumes remained unchanged in the outlook report, which continues to forecast a $2.1 trillion year for 2013, with $1.72 trillion of that amount coming from conventional originations and $380 billion coming from Federal Housing Administration originations.
“The housing recovery keeps chugging along despite the recent market hysterics around [Federal Reserve] taper talk which caused mortgage rates to jump over the past month, said Frank Nothaft, VP and chief economist at Freddie Mac, in the report.
We won’t know the immediate impact on the pop in mortgage rates for another couple months. However, we don’t expect them to stall the housing recovery because demand is strong, supply is limited and housing affordability remains strong in most markets for most families, he said.