The latest monthly totals for Shelby County’s mortgage market show homebuying improved somewhat last month, with total mortgage volume up 12 percent compared to February 2013, according to real estate information company Chandler Reports,www.chandlerreports.com.
It also was an increase from the previous month, when cold weather was cited as one of the reasons buyers sat on the sidelines and helped the local mortgage market enter 2014 down 5 percent compared to January 2013.
February’s 12 percent jump from the same month a year ago reflected total mortgage rising to almost $72 million from almost $64 million, according to the Chandler numbers.
While February beat its year-ago numbers, unlike January, February’s numbers were down from the previous month. January may have been colder, but the mortgage market then was hotter, producing a total volume of a little more than $89 million.
In terms of the number of mortgages, the number made last month rose to 455 from 404 in February 2013. The average mortgage amount slipped just slightly over those two February periods, from $158,005 to $157,224.
Bankers have a kind of steady, measured expectation for what the year will produce for mortgages, based on what they’ve seen so far. Magna Bank chairman, president and CEO Kirk Bailey, for example, is forecasting mortgage origination volume in 2014 to be down slightly from 2013 production totals in Memphis.
“We expect interest rates for home loans to remain very attractive to consumers in the near term,” he said. “Mortgage refinance volume has declined dramatically, but home purchase business has picked up with an adequate inventory of houses available for purchase and improving consumer confidence.”
Bolstering Bailey’s comments about interest rates was news in recent days that average U.S. rates on fixed mortgages dropped after three weeks of increases, with Freddie Mac saying March 6 the average rate for a 30-year loan dropped to 4.28 percent from 4.37 percent the previous week.
The average rate for a 15-year mortgage fell to 3.32 percent from 3.39 percent.
Meanwhile, Patriot Bank executive vice president Keith Barger said his bank has noticed an uptick in new applications over the past few weeks that Patriot expects will edge the number of mortgage closings higher for March and April.
But there’s no denying the market’s slow start, which extended beyond mortgages to real estate aspects like home sales. The year began with sales down 18 percent in January compared to January 2013, with real estate agents pointing at factors like the weather as the reason why.
Barger cites “continued employment volatility and an unusually cold winter” as reasons for the mortgage market’s slow start this year.
Meanwhile, banks and lenders that saw some of the biggest gains in mortgage volume in February compared to the same point in 2013 included BancorpSouth, which grew its volume to almost $4.1 million from a little more than $2 million, according to the Chandler numbers.
Renasant Bank likewise saw a big pop in its volume, which swelled to a little more than $1.4 million last month from $607,330 in February 2013.
Commercial Bank & Trust also grew its volume to almost $821,000 from $251,600 during that same period.
Among locally based lenders, First Tennessee Bank – the largest bank based in Memphis – saw a 26 percent drop in its mortgage volume last month compared to February 2013. First Tennessee’s volume slipped to about $1.3 million from almost $1.7 million during that period.
Chandler Reports is a division of The Daily News Publishing Co. Inc.