Mortgage lending in 3rd quarter rose to a record $1.06 trillion

People continued to take advantage of low rates, especially to refinance

November 23, 2003|By BLOOMBERG NEWS

U.S. mortgage lending rose to a record $1.06 trillion in the third quarter as people rushed to take advantage of the lowest interest rates since Dwight Eisenhower occupied the White House.

For the first time, the dollar value of purchased and refinanced home loans rose above $1 trillion in a quarter, Douglas Duncan, chief economist for Washington-based Mortgage Bankers Association, said Thursday. The amount was a 9 percent gain from the $975 billion registered in the second quarter.

A record $722.8 billion was for refinanced loans, beating the prior high of $663 billion in the second quarter, MBA said. The average U.S. rate for a 30-year fixed mortgage fell to 5.21 percent in mid-June, the lowest since 1958, spurring people to apply for mortgages. Those transactions wouldn't have closed until the third quarter, Duncan said.

"We saw rates that, for most of us, were the lowest in our lifetime," Duncan said. "We're not likely to see that again, so I think that quarter will come down as the all-time peak quarter for originations."

Sales of new and existing homes probably will reach 7.04 million this year, a gain of 7.7 percent from the record 6.54 million sold in 2002, said David Lereah, chief economist of the National Association of Realtors.

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