Mortgage Daily Logo
mortgage news from industry experts

Solid 2005 Originations Won’t Hold in ’06

Solid 2005 Originations Won’t Hold in ’06

Fannie Mae releases mortgage market report

December 22, 2005

By COCO SALAZAR

photo of Coco Salazar
Mortgage debt grew at the fastest pace in a quarter century because of robust home equity lending and record home sales.

Single-family mortgage debt outstanding surged in the third quarter at a 15.9 percent compound annual rate, while in the second quarter it was 15.0 percent, according to Fannie Mae’s latest Economic and Mortgage Market Developments report.

The combined 15 percent annualized growth rate in mortgage debt outstanding for the second and third quarter “was the fastest two-quarter increase since 1979,” said David Berson, Fannie chief economist, in the report.

Berson attributed the rapid rise to record home sales and double-digit home price appreciation, as well as growth in home equity loans — which respectively climbed 24.0 and 16.2 percent in the second and third quarters, although down from a year earlier when it was 36 percent. He also noted cashout-refinance activity continued to be strong.

The midyear increase lead Fannie to raise its estimate of single-family mortgage debt outstanding growth for 2005 to 12.9 percent, the report said.

The Office of Federal Housing and Enterprise Oversight recently reported 2004 residential mortgage debt outstanding grew by 13.4 percent to $8.7 trillion — the highest annual growth rate in 18 years.

Home equity in owner-occupied housing reportedly rose to a record $10.3 trillion in the last three-month period.

Berson noted that Fannie raised its estimate of total originations for this year to $2.83 trillion — the second best year.

For 2006, the economist sees the slowdown in home sales and home price appreciation dipping purchase originations to 1.45 trillion, and higher mortgage rates decreasing refinances to nearly $0.7 trillion — reducing overall mortgage originations about 26 percent annually.


Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.e-mail: MortgageWriter@aol.com

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts

THE TRUSTED PROVIDER OF ACCURATE RATES AND FINANCIAL INFORMATION