Mortgage group raises its estimates for lending volume

REAL ESTATE WATCH

January 25, 2004|By Bloomberg News

Mortgage group raises its estimates for lending volume

The Mortgage Bankers Association raised its estimate for lending volume this year and last after mortgage rates slipped below 6 percent during the final weeks of 2003.

Mortgage lending probably rose to $3.79 trillion last year, 13 percent higher than the group predicted last month. This year, mortgage volume likely will reach $1.99 trillion, 25 percent higher than the group called for a month ago. The estimates were released last week.

Home purchases surged during the final months of 2003 as mortgage rates retreated to about half a percentage point above June's 45-year low. Applications for mortgages to purchase homes climbed to a record last week after hitting a six-month high in November.

Housing starts unexpectedly rose to an annual pace of 2.088 million last month, the highest since February 1984. That brought the number of homes started last year to 1.848 million, the highest in 25 years, the Commerce Department said yesterday.

At the end of last year, the average U.S. rate for a 30-year fixed mortgage was 5.81 percent, compared with 5.21 percent in June, the lowest since 1958, according to mortgage giant Freddie Mac.

On an annual basis, mortgage rates probably will average 6.1 percent this year, the group said.

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