A stronger than expected refinance market led Fannie Mae to increase its origination projections for the first quarter by nearly 4% in its March outlook.
But the government-sponsored enterprise cut its volume estimates for the remaining three quarters of the year.
Fannie is now forecasting $384 billion in volume in the first quarter, including $217 billion in purchase volume and $167 billion in refinancing. In February, Fannie projected there would be $369 billion in total first-quarter originations, including $218 billion of in purchase loans and $151 billion in refinancing.
Origination estimates for the next three quarters have been revised as follows: $466 billion in the second quarter, down from $467 billion; $440 billion in the third quarter, down from $447 billion; and $399 billion in the fourth quarter, down from $405 billion.
Fannie continues to forecast almost $1.7 trillion in total originations for 2018 as a whole.
While the economic forecast for the year is strong, mortgage volume later in the year could fall due to an accelerated increase in mortgage rates and limited housing inventory.
The average 30-year fixed mortgage rate is now forecast to climb to 4.5% by year-end, up from 4.4%.
Fannie previously estimated there would be 6,276 total home sales in the first quarter, but this month the agency lowered that total to 6,086.
“On housing, home sales got off to a rough start in 2018, bottle-necked by the persistent challenges of the inventory shortage. Of course, there’s a flipside to the demand-supply imbalance, and strong home price appreciation continues to come as welcome news to existing homeowners,” said Fannie Mae Chief Economist Doug Duncan in a press release.