Shelby County Mortgages Up 7 Percent in Third Quarter

By Andy Meek

The gas tank of Shelby County’s mortgage market continues to be powered by the fuel of low interest rates and more of a willingness from lenders to make new loans.

Banks and mortgage lenders made 2,521 purchase mortgages in Shelby County during the third quarter, a 7 percent improvement from the 2,364 mortgages during the third quarter of 2012, according to the latest data from real estate information company Chandler Reports,

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

Mortgages averaged $177,410 during the quarter, up 11.6 percent from the $159,002 average during the same period in 2012. The total volume jumped 19 percent to a little more than $447 million during the third quarter this year, from $375.8 million in the third quarter of 2012.

The third quarter’s volume also was a big gain over the $337.9 million in mortgage volume for the second quarter this year.


Mike Edwards, president and chief operating officer of Paragon National Bank, said the current rate environment has led his bank to see a “very dramatic shift” from mortgage refinance to purchase mortgage activity. Over the two third-quarter periods, for example, Paragon saw its mortgage volume jump from $3.5 million to almost $7.5 million, according to Chandler Reports.

“A couple of years ago, we’d see some months with 80 percent and higher refinance activity, and now it’s 80 percent and higher purchase activity,” Edwards said. “Volume is still good. We’re performing above budget. We’ve got a good pipeline, and right now we already have closings in November.”

September mortgages rise 2 percent

September saw a slight improvement in the county’s mortgage market compared to September 2012.

Last month saw 705 purchase mortgages made, a 2 percent improvement from 693 mortgages in September 2012, according to real estate information company Chandler Reports,

September’s mortgage volume totaled almost $117.5 million, up from a little more than $106 million in September 2012. And the average mortgage amount between the two September periods rose to $166,685 last month from $153,137 in September 2012.

The top lenders last month were Community Mortgage Corp. with 63 mortgages, Magna Bank with 56 mortgages, Wells Fargo with 35 mortgages and Regions Bank with 33 mortgages.

– Andy Meek

He said the biggest factors in that activity for Paragon are the low interest rate environment and “better pricing for homes.” Paragon also has an interest in adding new staffers to its mortgage operation.

Looking at Shelby County’s mortgage activity year-to-date, meanwhile, the trend line is similar to the third quarter’s. Through Sept. 30, lenders had made 6,377 mortgages, the average mortgage was $169,842, and total volume was a little more than $1 billion.

All of those numbers surpass where the market was through Sept. 30 last year. During that period, lenders made 6,103 mortgages, the average mortgage amount was $154,166, and volume was almost $941 million.

The uptick in mortgage activity mirrors the county’s home sales results in the third quarter. From July through September, there were 4,686 home sales, up 12 percent from 4,176 in the third quarter of 2012.

Regarding third-quarter mortgage activity for the largest banks based in Memphis, First Tennessee Bank was down 35 percent, recording 22 mortgages during the third quarter of 2013 compared with 34 mortgages in the third quarter of 2012. Independent Bank was up 80 percent, with nine mortgages compared with five a year ago.

Metropolitan Bank grew its number of mortgages from 11 to 29 over the same period, while Magna Bank’s slipped a little, from 183 to 173.

Count First Alliance Bank among those banks seeing a spurt in activity. Hunt Campbell, president and CEO of First Alliance, said his institution has found its sea legs again when it comes to mortgage activity.

“We have just gotten back in the mortgage business after being out of it for several years,” he said, adding that most of the demand at the moment is coming from homebuyers. He said First Alliance’s refinance business, on the other hand, has been “substantially curtailed.”

Since this report is a look back at the third quarter, it doesn’t capture any effects from the events of early October stemming from the shutdown of the federal government. After that happened, some homebuyers could have been delayed in their efforts while lenders are blocked from key actions such as confirming Social Security numbers and accessing IRS tax records.

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