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VOL. 131 | NO. 9 | Wednesday, January 13, 2016

Shelby County Mortgage Activity Solid in 2015

By Andy Meek

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The Shelby County mortgage market had a strong 2015, and lenders expect the momentum to continue for the foreseeable future.

Among loans made at the time of purchase, banks and mortgage lenders made 9,368 mortgages in Shelby County during 2015, up 11 percent from the 8,470 mortgages during 2014, according to the latest data from real estate information company Chandler Reports, chandlerreports.com.

Looking at other metrics, the average purchase mortgage amount for all of 2015 stood at $176,186, up 2.4 percent from the average of $171,974 in 2014. And total mortgage volume for the year climbed 13 percent, to more than $1.6 billion from a little more than $1.4 billion in 2014.

Comparing that volume increase to 2013-2014 puts the past year in context: While mortgage volume rose 13 percent from 2014 to 2015, it was up just 4 percent from 2013 to 2014.

And never mind the Federal Reserve hiking interest rates in December, says First Tennessee Bank executive vice president of consumer banking Dave Miller.

Conditions, he says, should remain attractive for borrowers through 2016.

“Mortgage demand was strong throughout 2015, although we saw a typical seasonal slowdown over the holiday season,” Miller said. “Despite the Fed raising short-term rates, mortgage rates, which are longer-term, haven’t risen much and likely will remain attractive for borrowers over 2016.

“So, if the economic recovery continues and consumer confidence remains solid, 2016 should see continued demand for home purchases.”

Likewise, Barbara Bowles of Hobson Realtors said the Fed rate hike has had little effect on mortgage rates. Activity in the first quarter also has been robust, she adds, noting that “our inventory is still low, so this is really a good time to put property on the market since there is less competition than in the spring.”

Looking back over 2015, mortgage activity was up on a volume basis every month except two. January was down so little, though, that the difference over January 2014 made things almost flat, while September’s volume was off 3 percent year over year.

The fourth quarter of 2015 was also solid, the Chandler Reports data show.

The county saw an 8 percent increase in the number of purchase mortgages in the fourth quarter – 2,205, up from 2,036 during the year-ago period.

Between October and December, total mortgage volume rose 12 percent to more than $383 million, up from almost $344 million in the same period in 2014. And the average mortgage amount in the fourth quarter was $173,803, up 3 percent from the $168,731 during Q4 2014.

The fourth-quarter numbers did show declines from the prior third-quarter period, between July and September. Mortgage totals, average mortgage amount and mortgage volume were all down – 22 percent, 3.2 percent and 25 percent, respectively.

Aside from that, the phones appear to have been ringing steadily in the offices of mortgage brokers around the county. And buyers – buoyed by the confidence that comes with things like a feeling of job security as the employment picture improves – have been and remain ready to sign on the dotted line.

Looking at all of 2015, top lenders included Community Mortgage Corp. leading the way with almost $134 million in purchase volume, followed by Iberiabank with almost $109 million. Magna Bank (which didn’t get put under the Pinnacle Financial Partners banner as a result of Magna’s acquisition until closer to the end of the year) also was near the top, with more than $90 million in purchase volume, according to the Chandler numbers.

“The confluence of continued low long-term rates, relatively low supply and improved unemployment numbers should drive sustained strength in the Memphis-area mortgage market,” said Bank of Bartlett chief financial officer Justin Byrd.

Another related trend he points to is increased residential development activity in several parts of the metro area. He said that development bodes well for the residential construction market “as subdivisions have to be approved, entitled and engineered prior to actual construction taking place.”

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

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 133 1,342
MORTGAGES 0 131 1,047
FORECLOSURE NOTICES 20 39 190
BUILDING PERMITS 0 305 3,056
BANKRUPTCIES 17 135 753
BUSINESS LICENSES 0 53 329
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0