Could the Housing Boom Go The Way Of The Dot.com Economy?

Real estate is hot and so is real estate lending. Last year, in a down economy, first mortgage lending set an all time record of $2.1 trillion. In credit unions, first mortgage originations in the first quarter are exceeding the pace of the fourth quarter. For all of last year credit unions made a record, $46 billion, in first mortgages.

 
 

Real estate is hot and so is real estate lending. Last year, in a down economy, first mortgage lending set an all time record of $2.1 trillion. In credit unions, first mortgage originations in the first quarter are exceeding the pace of the fourth quarter. For all of last year credit unions made a record, $46 billion, in first mortgages.

Low interest rates, good weather and a robust housing market have led to instances of prices selling above list and multiple bids for new listings in select suburban markets. The boom in real estate values contrasts with the stock market which has had two consecutive loosing years. By contrast owner occupied real estate has increased in value every year since 1994.

This rise in value has helped to offset the fall in household net worth impacted by the decline in the equity markets. Douglas Duncan, chief economist at the Mortgage Bankers Association, calculates that over $80 billion has been taken out of housing values via refinancings. Some of these funds have been spent and some have been used to payoff debt.

So, is the housing boom coming to an end? If the economy continues to recover, will interest rates follow? What role can credit unions expect to play in real estate financing this year.

Douglas Duncan, one of the nation's leading experts on all aspects of mortgage activity, will speak to credit unions at the annual Financial Strategies Conference in July at Carmel Valley Ranch, Ca

 

 

 

 

May 6, 2002


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