WASHINGTON – Economists with Freddie Mac are projecting that single-family originations will decline 15% next year.

Originations will total $1.7 trillion in 2013, down from $2 trillion this year as refinancings slow. Freddie Mac’s chief economist Frank Nothaft sees refinancings at 60% of originations by yearend 2013, compared to 75% in 2012.

“A pickup in home purchase lending will probably be insufficient to offset the dip in refinance,” Nothaft said in a report issued by Freddie Mac.

Analysts at Keefe Bruyette & Woods are more dour. They expect lenders will originate $1.54 billion in single-family loans in 2013, down 9.4% from this year.

Home prices will rise by roughly 4% next year and credit availability should loosen up a little bit, according to KBW managing director Bose George. However, he is not bullish on purchase mortgage activity.

“We remain cautious on volume expectations for the year and expect modest growth of 5% to 10% in the purchase market,” KBW said in a report.

But the Home Affordable Refinance Program will have another strong year and fuel $150 billion in refis next year, down slightly from this year. “We expect HARP to continue boosting gain-on-sale margins,” the KBW analysts write.


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