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VOL. 127 | NO. 138 | Tuesday, July 17, 2012

Q2 Mortgages up 14 Percent

By Andy Meek

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Shelby County’s mortgage market is continuing to turn a corner, with more buyers during the second quarter signing on the dotted line and bankers handing over a shiny new set of keys.

During the second three months of 2012, banks and mortgage lenders in Shelby County made 2,149 purchase mortgages, up 14 percent from the 1,878 mortgages during Q2 2011, according to real estate information company Chandler Reports, www.chandlerreports.com.

Total volume during that same period rose 22 percent, from a little more than $274 million in Q2 2011 to a little more than $334 million in Q2 2012.

Data for this report included purchase mortgages only, not refinances.

Lenders who notched gains in the number of mortgages they made during Q2 included Community Mortgage Corp. (from 215 mortgages in Q2 2011 to 231 mortgages in Q2 2012), Magna Bank (from 150 to 153) and Patriot Bank (from 82 to 110).

Community Mortgage Corp. topped the list of the county’s busiest lenders, growing its total volume quarter over quarter from $31.5 million to a little more than $38 million, according to the Chandler data.

It’s reflective of what some observers see as hopeful signs for housing. In the most recent economic commentary distributed by FTN Financial, a division of Memphis-based First Horizon, FTN Financial economist Lindsey Piegza makes the interesting note that housing is partly a good story right now – because it’s no longer a bad one.

“Prices have risen in recent months, though they are still down from a year ago,” she wrote. “There is still an enormous overhang of supply, but even this seems more manageable now that sales have stopped falling. But, the biggest positive about housing is the absence of a big negative: housing is no longer in free fall.”

Todd Brown, the current treasurer of the Memphis Mortgage Bankers Association and the area manager for Mortgage Investors Group, said his business is getting some activity from move-up buyers at the moment but that the bulk of the business is coming from the first-time homebuyer who doesn’t have a house to sell.

“We are seeing a positive trend in the purchasing environment,” Brown said. “We’re certainly doing plenty of refinances. But we were about 60 percent purchase last month, so we’re pretty pleased with that.

“My Realtor partners I’ve talked to are seeing some increased traffic as well. I’d say it’s a combination of consumer confidence, rates are at record lows right now, and it’s a great market for a first-time homebuyer, for sure, because the inventory’s out there.”

Nationally, mortgage applications decreased 2.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 6, 2012. The week’s results include an adjustment for the Fourth of July holiday.

“Mortgage rates under 4 percent continue to provide incentive for borrowers to refinance,” according to the national association.

The MBA is anticipating rates to rise in the second half of the year, however, fueling a refinance wave larger than last year’s while purchase mortgage activity would essentially stay flat on a national level in 2012 compared to 2011.

As rates rise and fewer eligible borrowers remain, according to the MBA, refinance originations are expected to drop in 2013.

Chandler Reports is a division of The Daily News Publishing Co. Inc.

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PROPERTY SALES 105 105 9,674
MORTGAGES 82 82 11,396
BUILDING PERMITS 134 134 20,444
BANKRUPTCIES 58 58 6,495

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