From where he sits, Renaissance Realty’s Jeff Jenkins is optimistic that 2013 will be a fruitful one for the local real estate industry.
Last month’s mortgage activity in Shelby County suggests why Jenkins, a real estate agent, feels that way.
Mortgage volume climbed to almost $107 million in April from $88.5 million the same month a year ago, according to real estate information company Chandler Reports, www.chandlerreports.com. The number of actual mortgages made during the month was 672, up from 608 in April 2012. And the average mortgage amount rose from $145,623 in April 2012 to $159,012 last month.
Last month’s mortgage total also was an improvement over March’s. The number of mortgages made rose from 596 in March to April’s 672. However, March saw a higher average mortgage amount ($167,834) than April.
That activity tracks with what’s been a general pattern in the county’s housing market of late. Home sales were up last month to 1,337 from 1,113 in April 2012, according to Chandler Reports. And there’s been a general improvement in other real estate areas as 2013 has unfolded.
“The recovery is here,” Jenkins said. “Yes, the mortgage market is still a little tight, but in my opinion it is where it should be. It appears that lenders have established good policies for loan approvals, and what we are experiencing is that lenders are certainly willing to make loans to good borrowers.”
That’s not to say that lending trend is manifesting itself uniformly in the banking sector, however. Two of the three largest banks based in Memphis, for example, saw their mortgage volume fall in April compared to April 2012.
First Tennessee Bank’s April mortgage volume was $1.1 million, down from $1.6 million in April 2012, according to Chandler Reports. Independent Bank’s mortgage volume rose during that same period (to $769,060 from $91,680). And Magna Bank’s volume fell, to $7.8 million from a little more than $8 million.
Community Mortgage Corp. led the way during April in terms of mortgage volume. Its volume was a little more than $10 million, up from $9.6 million in April 2012.
Smaller area banks have reported positive mortgage-related trends of late, such as Bank of Bartlett. The Bartlett-based bank saw its mortgage-related revenue for the first quarter grow to $748,041, an 86 percent increase over the same quarter in 2012.
Similarly, one of Metropolitan Bank’s largest growth areas in the first quarter was mortgage banking revenue, which experienced an 85 percent year-over-year increase.
Banks may indeed want to lend, but that’s not to say the economy is always going to let them or make it easy. In his latest public presentation offering his take on the economy and financial markets, Chris Low, chief economist for FTN Financial, a division of First Tennessee Bank, said the U.S. economy is still growing at about the same unexciting rate as it was last year.
Also, one worrying sign Low took away from the latest employment data is what he called a large increase in temporary help hiring.
“The average workweek fell by two-tenths of an hour in April, and aggregate hours were down,” Low said. “It implies companies are moving to lower-quality jobs. From full time, to part time.
“I think what this is telling us among other things is while the U.S. is not in danger of falling into a recession – it’s not that kind of a spring slowdown – it is nonetheless a slowdown.”
Chandler Reports is a division of The Daily News Publishing Co. Inc.