Industry Watch

INDUSTRY WATCH

April 13, 2003|By From Bloomberg News and staff reports

Banks raise forecast of loan volume 31% to $2.6 trillion in '03

The Mortgage Bankers Association of America raised its forecast for 2003 loan volume by 31 percent last week, as low interest rates spur another wave of refinancings by homeowners.

The expected $2.6 trillion in loans would be a record and above a preliminary estimate of $1.98 trillion, said Phil Colling, an economist with the Washington-based trade group. A record $2.46 trillion was lent in 2002.

Housing has helped sustain the U.S. economy through home price increases and refinancings, allowing consumers to extract $680 billion in equity to spend in 2002, according to Federal Reserve Chairman Alan Greenspan. The average rate for a 30-year fixed mortgage dropped to a 40-year low of 5.61 percent during the week that ended March 14, according to Freddie Mac.

Mortgage rates probably will average 5.8 percent this year and 6.1 percent in 2004, compared with 6.6 percent in 2002, according to Freddie Mac, the second-largest mortgage buyer after Fannie Mae.

The National Association of Realtors also boosted its forecast, and expects home sales this year to fall 1.3 percent to 6.46 million, compared with a month-ago estimate of a 1.5 percent decline. In January, the Washington-based trade group estimated that the market would drop 3.8 percent.

About half of the $200 billion of equity extracted in so-called "cash out" loan refinancing was used for consumer spending that included renovations, and the other half was used to pay off home equity loans and credit cards, Greenspan said in a speech to the Independent Community Bankers of America last month.

In addition, last year saw a record $130 billion net increase in home equity loans, and a $350 billion net increase of debt after consumers repaid old mortgages and bought another home, Greenspan said.

Awards of excellence given to homebuilders

The Sales and Marketing Council of the Home Builders Association of Maryland announced the 2002 Maryland Award of Excellence winners at a ceremony last week. The awards were presented before a gathering of about 800 people at the Hyatt Regency in Baltimore.

Awards of excellence winners included:

The Mark Building Co., Enterprise Homes Inc. for the Coastal model at WaterView in Essex. This was awarded for the large-volume builders category for single-family homes costing $249,999 and under.

Barry Andrews Homes for the Michael Allen model at Whitaker Woods in Northeast. This was awarded for large-volume builders with homes costing between $250,000 to $324,999.

Barry Andrews Homes for the Wesley Roberts model at Rock Run Estates in Port Deposit. This was awarded for large-volume builders with homes costing between $325,000 and $399,999.

Ryland Homes for the South Hill II model at Emerson Laurel. This was awarded for large-volume builders with homes costing between $400,000 and $474,999.

Williamsburg Group for the Dorchester II model at Emerson in Laurel. This was awarded for large-volume builders with homes costing between $475,000 and $599,999.

Craftmark Homes for the Chevy Chase model at Stratford in Laurel. This was awarded for large-volume builders with homes costing between $600,000 and $749,999.

Tyler Homebuilders Inc. for the Augusta model at The Vistas of Turf Valley in Ellicott City. This was awarded for small-volume builders with homes costing between $600,000 and $749,999.

Washington Homes for the Whitehall model at Eagle Pointe in Annapolis. This was awarded for large-volume builders with homes costing more than $750,000.

Gemcraft Homes for the Ruxton model at Walnut Manor in Rising Sun. This was awarded for large-volume builders with town houses costing between $160,000 and $199,999.

Ryland Homes for the Chandler model at Cypress Hills in Abingdon. This was awarded for large volume builders town houses costing between $200,000 and $249,999.

Craftstar for the Annapolis II model at Clarksburg Town Center in Clarksburg. This was awarded for large-volume builders for town houses costing more than $325,000.

NVHomes for the Severn model at The Villages at Woodholme in Pikesville. This was awarded for large-volume builders with active-adult housing costing $419,999 and under.

Koch Homes for the Ridgely model at Crofton Colony in Crofton. This was awarded for large-volume builders with active-adult housing costing more than $420,000.

Williamsburg Group for the Huntington model at Chapel Woods in Clarksville. This was awarded for large-volume builders with custom housing costing more than $600,000.

Baldwin Homes for the Charles Ridgley in Millersville. This was awarded for small-volume builders with custom housing costing more than $600,000.

Rachuba Home Builders for The Lombardy model at Ivy Hollow in Cockeysville. This was awarded for small-volume builders with housing costing less than $499,999.

Golden Builders for a private residence at Belvoir Farms in Crownsville. This was awarded for large-volume builders with custom housing costing between $500,000 and $749,999 and in the category of more than $750,000.

Artery Homes for the McKinley model in Bethesda and J. Paul Builders for the Hansel and Gretel model at Caves Valley Golf Course in Owings Mills. This was awarded for small-volume builders with custom housing costing more than $750,000.

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