Upbeat report on economy

Strong economic growth is forecast through 2006, according to the Mortgage Bankers Assn.’s second-quarter update, released Wednesday.

“The U.S. economy is gaining strength in a sustainable, broad-based manner in 2004, as we have anticipated, and looks to continue that growth over the three-year forecast period,” said Doug Duncan, MBA’s chief economist and senior vice president. “The job market will steadily get stronger even in the presence of sustained high levels of productivity growth, resulting in continued strength in home-purchase activity.”

Mortgage originations are expected to decrease but are predicted to hit $2.57 trillion in 2004, $1.96 trillion in 2005 and $1.85 trillion in 2006. The bulk of the drop-off will be in refinancing.

Origination loans for home purchases are expected to be $1.38 trillion in 2004, $1.37 trillion in 2005 and $1.42 trillion in 2006, up from 2003’s $1.27 trillion.

Briefly ...

* The majority of American consumers prefer long-term fixed-rate mortgages to adjustable-rate mortgages, according to data from the Federal Housing Finance Board; 82% of consumers nationwide preferred fixed-rate mortgages in 2003.

From Times wire reports