WASHINGTON–Freddie Mac is forecasting a decline in mortgage lending in 2017.
The company said it expects originations to fall back, from a record $2 trillion this year to $1.65 trillion next year.
That decline will not be the result of fewer new mortgage originations, according to Freddie Mac, which is projecting that both purchase and home improvement mortgage activity is actually expected to rise next year. Instead, Freddie Mac expects a substantial drop in refinance activity.
Freddie Mac’s current forecast shows it expects to see $1 trillion in refinance mortgage originations in 2016, but projects that 2017 refinance volume will fall about 41% to just under $600 billion.
The primary culprit behind the decline: A projected increase in rates, said Freddie Mac.