Mortgage deals nearly doubled last year

Real Estate Watch

February 10, 2002

Mortgage bankers can look back at 2001 as a banner year during which consumers nearly doubled the dollar amount of loans originated compared with 2000.

The Mortgage Bankers Association of American (MBAA) reported last week that loan originations totaled $2.036 trillion in 2001 vs. $1.024 trillion in 2000. Of the $2.036 trillion, $896 billion was for home purchases and $1.14 trillion was for refinancings. The MBAA predicts that consumers will generate $1.41 trillion in mortgages this year, and it expects the 30-year fixed rate to average 7.2 percent.

In terms of wealth creation, housing last year by far outpaced the stock market. According to the MBAA, home values increased 9.1 percent, while the stock market was off 3.4 percent. The association also reported that home prices increased an average of 8.1 percent during the past three years, placing the net equity of U.S. homes at $6.7 trillion through September.

Homeowners who refinanced last year pulled an estimated $80 billion in cash equity from their homes.

With more mortgage activity comes more lenders. The association reported that by the end of last year, the industry had 341,900 employees, an increase of 42,000 during the year.

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