Local Mortgage Market Sees Busy November

By Andy Meek

If mortgage bankers in Shelby County were expecting things to start winding down for the year in November, the pace of activity for the month kept them unexpectedly busy.

Purchase volume soared during November over the year-ago period, according to new figures from real estate information company Chandler Reports, www.chandlerreports.com. October had already seen a year-over-year pickup in activity to kick off the fourth quarter, and that pattern continued last month.

November saw a 61 percent jump in purchase mortgage activity over November 2015 – from a little more than $105 million to almost $170 million, according to the Chandler figures.

The number of mortgages themselves likewise saw a big spike. Those climbed during the same November-to-November period from 586 to 934 – a 59 percent gain.

“Mortgage volume continues to be strong at Paragon, with a majority of our loan volume this year being for purchase transactions,” said Paragon Bank chief operating officer Mike Edwards. “December’s closings are shaping up to be one of the top months of the year, which is contrary to past years. This is due to a healthy housing market and the market’s reaction to the election on November 8th.”

He added that Paragon is forecasting even stronger purchase loan activity in 2017 and a continued tapering off of refinances. To put that in context, he said refinances this year have been almost 45 percent of Paragon’s total volume, whereas the bank next year thinks that will drop below one-third of total closings.

Speaking of his bank, Paragon in recent days announced its third straight quarter of record profitability. Net income for the third quarter increased more than 10 percent, to almost $600,000; total revenue hit a record $4.8 million.

Bo Allen, West Tennesee president for First Tennessee Bank, sounds a similar theme, noting that mortgage refinancing has slowed down alongside an increase in interest rates.

“However, we have not seen a slowdown in new homes purchased, and the market for larger homes seems to be very good right now in Memphis,” Allen said.

The numbers for November bear out those assessments.

From Jan. 1 through the end of November, purchase mortgage volume in Shelby County approached $1.8 billion. That’s up from a little more than $1.5 billion during the same period in 2015 – a 16 percent gain.

Lenders are extending bigger mortgages, too. The average mortgage amount year-to-date through the end of November stood at $180,310, up from $176,362 during the year-ago period.

Over that same 11 months, the number of mortgages made was likewise up, by 14 percent (from 8,570 to 9,728).

Brokers and mortgage lenders have told The Daily News that generally throughout 2016, mortgage activity has been spread around the city and outer suburbs. They agreed that trend continued through November, and likely will for the rest of the year.

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