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Fannie sees total origination volume rising 7% this year thanks to refinances and moderate house price growth, with refinance activity accounting for 32% of originations. That’s up from 29% last year and is more than two percentage points higher than estimated a month ago.
Fannie’s latest forecast has the Fed cutting rates by 25 basis points in July and again in December, as real GDP growth slows to 2.1% for full-year 2019 and to 1.6% next year.
“Housing remains a net positive to the economy, as the industry anticipates growth fueled by strong household balance sheets, low mortgage rates, and a surge in refinance activity,” said Fannie Mae’s senior vice president and chief economist, Doug Duncan, in a statement.