Home lending in Texas, especially along the Mexican border, is big again.
Credit the North American Free Trade Agreement.
Nafta, which went into effect in January, has spurred a boom in economic activity throughout the state, say lenders and economists. And in southern cities like El Paso, San Antonio, and Corpus Christi, that has created a home lending rejuvenation.
"The most significant thing that is going on in Texas is the border activity," said James E. Hinton, president of Pacific American Mortgage Co. in Dallas.
The number of home loans closed in El Paso County during the first seven months of 1994 were up 20% over the same period last year, according to TRW Redi Property Data, Riverside, Calif. In Bexar County, around San Antonio, loans close were up 21%. And in Travis County, where Austin is located, it was up 13%.
Steven Cochrane, senior economist, Regional Financial Associates, West Chester. Pa. said the increased loan activity is a result of a Nafta-influenced economic boom.
"There are simply a lot of people moving in, positioning themselves for what is expected to be an increase in trade," Mr. Cochrane said.
But he said Nafta is only part of the success story in Texas. He said the statewide economy is being whipped up by a strong influx of people. Other states, such as Utah, are experiencing economic prosperity for similar reasons.
The strong growth has shrunk whatever excess housing supply the state had after the oil market took a downward turn in the late 1980s, Mr. Cochrane said.
Now, "housing growth is everywhere." in Texas.
He said it was stronger there than in other regions in the nation, although he could not supply any figures.
Mr. Hinton at Pacific American said the increased loan activity has been accompanied by some truly bitter competition.
"Competition is crazy; everybody is incredibly aggressive," said Marcia F. Phillips, president and chief executive of Guardian Mortgage Co. in Dallas.
Mr. Hinton said appraisal problems that usually arrive with an increase in loan activity have not come.
But "you have to wonder how long it is going to last," he said.
Pacific American is "cautiously expanding," he said. It will open three loan production offices within the next year, and double its loan production staff. Mr. Hinton said many of the new employees were originally fired as a result of consolidations at local lenders.
