Berson Raises Estimate to $3.7 Trillion for '03

Fannie Mae chief economist David Berson has once again upped his origination estimates for 2003 as mortgage rates continue to decline to record low levels.His new estimate of $3.7 trillion tops one he made in March of $3.3 trillion. He noted that purchase money applications (according to the Mortgage Bankers Association of America) jumped to record high levels in May, while refinancing applications are reaching the all-time highs they hit in early March. "We expect long-term rates to stay low for a while -- the Fed is unlikely to begin tightening monetary policy until next year and core inflation will probably drift still lower -- suggesting that mortgage applications should not fall significantly in the near-term," Mr. Berson said in his Weekly Commentary posted on Fannie Mae's web site. For 2004, he predicts a decline in the market of 45% to a "still strong $2.0 trillion."