March 2003

A Publication of ELLIOTT® & Company Appraisers

Mortgage Refinancing Generates 20% of Economic Growth

 

According to a study commissioned by the Homeownership Alliance of Washington, DC, the recent boom in mortgage refinancing has accounted for 20% of the real growth in the U.S. economy since 2001.

According to Mark Zandi, who led the study, the recession would have been much more severe without the drop in interest rates and the refinancing that followed.

"Since the refinancing boom began two years ago, close to $2.5 trillion in mortgage debt has been refinanced," Zandi said. "That's nearly half of all mortgage debt outstanding."

Zandi is the chief economist and co-founder of Economy.com.

"Even if the mortgage rates do rise in 2003, the economic benefits of the current refinancing activity will linger on for some time," he said. "The refinancing boom is largely responsible for allowing households to insulate themselves from the potential negative financial impact of higher interest rates."

Homeownership Alliance president, Rick Davis, noted, "While the stellar economic contribution of housing during this economic downturn has been well documented, the contribution of refinancing activity has not. This new study examines a crucial element of the housing industry that is having a profound effect on the economy. Refinancing positively impacts individual homeowners by providing a method of raising cash in difficult economic times."

In a separate study that shows the industry's recent contribution to the economy, the Mortgage Bankers Association of America estimated that mortgage industry employment has grown 37% since 2001, creating 110,000 jobs.

 

Home Ownership Rate in United States at All-Time High

 

According to figures published by the U.S. Census Bureau, the percentage of home ownership in this country is the highest it has been in the 100-year history of the bureau. In the fourth quarter of 2002 the bureau reported that 68.3% of all housing units in this country were occupied by their owners.

During the early years of the census, less than half of housing units had their owners living in them. The census of 1950 was the first to report more occupied housing units were owned by an occupant than rented. Other than the census of 1990 each one since 1950 reported higher home ownership rate than the previous census. The census of 2000 reported a national home-ownership rate of 66%, meaning that since then, the rate has passed the 2/3 mark.

The home-ownership rates by region in the fourth quarter of 2002 were 73.3% for the Midwest, 70.3% for the South, 64.9% for the Northeast and 62.6% for the West.

 

 

News >From Freddie Mac and Fannie Mae

 
Both Fannie Mae and Freddie Mac had the most activity in each of their histories during 2002. Fannie purchased $1.09 trillion in home mortgages last year while Freddie bought $642.3 billion of them. ... President Bush has named Mark Brickell, an investment banker and derivatives expert, to succeed Armando Falcon, a Clinton appointee, as director of the Office of Federal Housing Enterprise Oversight. The OFHEO oversees Fannie Mae and Freddie Mac. Brickell, who spent 25 years with J.P. Morgan & Co., has a reputation for being an expert on mortgage technology.
 

Quotes of Wisdom and Wit

 

"A diplomat is a man who always remembers a woman's birthday, but never her age."    -Ralph Waldo Emerson

"A conference is a gathering of important people who singly can do anything, but together can decide that nothing can be done."     - Fred Allen

"Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws."           -Plato

"A people that values its privileges above its principles soon loses both."
     -Dwight Eisenhower

"I'm all in favor of keeping dangerous weapons out of the hands of fools. Let's start with typewriters."     -Frank Lloyd Wright

 

 

Contact Us

Newsletter Editor: kevin@elliottco.com   

Web Site: www.appraisalsanywhere.com

 



ELLIOTT® & Company Appraisers currently offers appraisal service throughout all 50 of the United States. Clients are encouraged to place orders directly to any office local to properties to be appraised or to the central office for assignment.

Orders may be placed via telephone, fax or through the company's Web site. All Internet orders will be processed through the central office.

Some Offices Are Independently Owned and Operated
 

3316-A Battleground Avenue
Greensboro, NC 27410

 

 

 

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