Fannie: '03 Looks Good, '04 Not So

Fannie Mae thinks next year will be a darn good one for residential production but that 2004 looks a bit dicey.The secondary giant's chief economist, David Berson, is predicting $2.034 trillion in production next year and $1.45 trillion in 2004. The latter would be an ugly 28% decline from 2003 and a 42% plunge from 2002. If the industry does produce $2 trillion next year, it will be the third year in a row of $2 trillion-plus production. Even though Fannie anticipates a decline in refinancings next year, the purchase money business should be good, Mr. Berson predicted. At a media luncheon Dec. 18, Mr. Berson also noted that cash-out refinancings will likely set a record in 2002, eclipsing last year's volume of $110 billion. "About $65 billion of that amount was spent [by consumers]," he said. Next year should be a good one for cash-out refis, the economist said, but he did not offer any hard dollar numbers for either 2002 or 2003. Fannie Mae can be found on the Web at http://www.fanniemae.com.