Originations of real estate construction loans came to a halt in some key states at the beginning of 1995, according to a recent survey.

In a study of nine states, construction originations grew only 1% in the first four months of 1995 from the level in the period a year earlier. During the 1994 period, the same states saw a 31% increase in construction lending.

A slowdown in construction loans could mean fewer mortgages to buy homes further down the line.

The survey, by TRW Redi Property Data, Riverside, Calif., included major metropolitan counties in Arizona, Colorado, New Mexico, Nevada, Oregon, Washington, and Pennsylvania. All counties in California and Florida were included.

"The overall trend is a slowdown in volume of construction loans at financial institutions," said Nima Nattagh, an analyst at TRW Redi. The flat level of construction lending in 1995 is indicative of the negative outlook by lenders, who expect shrinking demand for new construction, including single-family, multifamily, and commercial building.

California is still in a real estate slump, according to the data, with a 16% decline in construction lending in early 1995.

Some of the data percent changes show a large increase that is often attributable to just one large commercial loan. In Pennsylvania in 1994, a $20.3 million commercial loan was made, accounting for the large percentage increase.

The leading real estate construction lender in the first four months of 1995 was Bank One, in Phoenix, with a 5.96% market share. The Arizona office is a wholesale construction lending subsidiary of Bank One Corp., Columbus, Ohio.

David Blackford, executive vice president, said the large market share of real estate construction lending in the Southwest is a result of lending to big construction firms in 1990 and 1991 when the real estate market hit a low point. As the market rebounded in 1994 and 1995, Bank One already had strong relationships with builders.

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