Mortgage activity was a bit lackluster in Shelby County last month compared to the same time in 2012, judging by the latest data.
Looking forward, though, bankers say the demand is there, the busy season for lenders is well underway and that the purchase mortgage business is at times far outpacing demand for refinances.
“We’re seeing good demand for mortgages,” said Carol McConkey, senior vice president at Paragon National Bank. “And purchases are definitely up, as well as people getting pre-approved to purchase a home.”
Mortgage volume nudged upward to a little more than $120 million in May from $119.5 million the same month in 2012, according to real estate information company Chandler Reports, www.chandlerreports.com. The number of actual mortgages made during the month was 751, down from 792 in May 2012. And the average mortgage amount rose from $150,940 in May 2012 to $160,711 last month.
Last month’s mortgage totals saw some bigger improvements over April’s numbers.
The number of mortgages made rose from 672 in April to May’s 751. The average mortgage amount was essentially flat ($159,012 in April, $160,711 in May) and the total volume saw a more noticeable jump, from $106 million in April to almost $121 million in May.
Year to date, mortgage volume in Shelby County was about $481 million, up from $433 million during the same period in 2012.
The data show May was a somewhat slow real estate-related month for reasons beyond mortgages. Numbers from Chandler Reports show local home sales were up in May only 5 percent, a tepid improvement that builders attributed to the temporary setback of a soggy spring and diminishing supply of lots.
That fact belies what lenders say is a growing appetite for loans among borrowers, for a variety of reasons. Some of those borrowers, for example, are starting to feel like the end might be in sight for low interest rates even if that end is still a long way off, said Steve Weaver, regional bank president for the Memphis area for First State Bank.
“We’ve picked up a bit,” Weaver said. “What’s picked up is purchases over refinances. I would say this time a year ago, we were 30 percent purchase and 70 percent refis. I think now that’s flip-flopped. At least in the Memphis market, we’re probably 70 percent purchase now and 30 percent refinance.”
“I think the purchase volume being up is driven by the fact (borrowers) know house prices are starting to go back up.”
Paragon National Bank
Paragon is another bank that’s seen that same shift. Though for Paragon it’s gone from more of a distinct gap between purchase and refinances last year to almost an even split between the two now, said McConkey.
“I think the purchase volume being up is driven by the fact (borrowers) know house prices are starting to go back up, rates are starting to go back up, so this is the perfect time to do something,” McConkey said. “For us, purchase demand is up across the board, not just with first-time buyers. From now till the time school starts back, we expect we’ll see a lot of people looking to make a move. May to August is usually a good time for purchases.”
For now, though, the three largest banks based in Memphis saw their mortgage volume fall in May compared to May 2012.
First Tennessee Bank’s May mortgage volume was $1.6 million, down from $3.4 million in May 2012, according to Chandler Reports. Independent Bank’s mortgage volume also fell during that same period (from $94,250 to $91,575). And Magna Bank’s volume also fell, from a little more than $10 million to $7.7 million.
Community Mortgage Corp. tends to always lead the pack in terms of mortgage volume, and its volume was down too during May. Its May volume was $11.2 million, down from $15.3 million one year earlier.
Chandler Reports is a division of The Daily News Publishing Co. Inc.