Mortgage Bankers Say Future Will Soon Start to Look Bright for Housing Market

WASHINGTON, DC-The Mortgage Bankers Association of America released its first ever three-year macro-economic and housing forecast during a conference call yesterday morning, and for the most part, things are looking good. MBA senior vice president and chief economist Douglas G. Duncan spearheaded the conference call, taking questions from the press at the end of the presentation. The report, which looks ahead through 2005, concludes that mortgages for the housing industry will look up as the economy and real growth increase, slowly but surely.

Specific to the multi-family sector, MBA does not expect an upswing until 2004. “We expect that housing starts this year will be flat; single-family starts are increasing, and we expect multifamily starts to decline,” Duncan notes in response to a GlobeSt.com inquiry during the conference call. According to the report, the quarterly average for multi-family housing starts in 2002 was 346,000, while that projected figure for 2003 is just 326,000. “In discussing the issue of house prices, one thing that we’ve pointed out to people is that the decision that the household makes is, in significant part, the relationship between rent–that is their monthly rental payment– and their after-tax principal and interest payments on a mortgage,” Duncan explains. “And what you’ll see is that in the short run–that is, over the last year to two years–you have seen that the mortgage payment has actually been lower than the typical rental payment. So what you’ve seen is the emergence of significant concessions in rental rates across the market.”