Shelby County Mortgages Up in October

By Andy Meek

The Federal Reserve has signaled its intent to buy mortgage-backed securities for much of the near future to try and goose the economy, which means mortgage rates are liable to keep skating along the bottom, as they are now.

That’s a boon to homebuyers, of which Shelby County keeps seeing more from one month to the next. October was no different, reflecting continued improvement in the local mortgage market over 2011. And some bankers say that’s not likely to slow down anytime soon.

Total mortgage volume throughout Shelby County last month was up 46 percent over October 2011, climbing to a little more than $113 million in October 2012 from $77.7 million during the same period last year, according to real estate information company Chandler Reports,

Similarly, there were more mortgages made last month – 733, up from 544 in October 2011. Also, the average mortgage amount rose to $154,382 last month from $142,789 in October 2011.

October also continued a rising trend over the prior month of September. Between September and October, total mortgage volume rose from $106.1 million to a little more than $113 million. The number of mortgages in October was up over 693 in September, and October’s average mortgage amount also was above September’s $153,137.

Kirk Bailey, president, chairman and CEO of Magna Bank, said that’s not likely to change in the foreseeable future for his bank, which is enjoying a strong run at the moment. In fact, depending on how the bank’s profit looks in the fourth quarter, 2012 is liable to be the best or second-best year ever for Magna.

“Fueled by refinance activity, residential mortgage lending activity remains strong as we close the books on 2012,” Bailey said. “As long as mortgage interest rates remain around current levels, lending activity will remain strong.”

Contrary to the conventional wisdom about lenders, said Frank Stallworth, executive vice president with Magna, “there’s lots of money out there” to lend.

That growth in mortgage activity coincides with general improvement in the county’s housing market, which saw 1,407 home sales recorded in October, up 36 percent from the 1,034 sales in October 2011.

And year-to-date home sales activity is up 18 percent, with 12,585 sales recorded through October, according to Chandler Reports.

Some of the largest Memphis-based banks reported mortgage volume increases over the two October periods. First Tennessee Bank’s October 2012 mortgage volume was $2.1 million, up from $616,950 in October 2011. Independent Bank’s mortgage volume also rose during that period (from $92,520 to $263,142). And Magna Bank’s volume during that same period rose from $6.2 million to $10.2 million.

Community Mortgage Corp. led the way during October in terms of mortgage volume. Community Mortgage Corp. grew its volume 25 percent from October 2011 to October 2012 (from $11.2 million to $14 million).

Community Mortgage Corp.’s October 2012 total also beat its volume during the previous month of September ($12.3 million).

The increase in lending is part of a broader mix of factors that affect consumer confidence. In a recent note to clients, Lindsey Piegza, an economist with FTN Financial, cited “stability in housing” as one reason consumers at the moment are feeling more confident about their income, their employment prospects and the sustainability of the nation’s economic recovery.

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