Mortgage Market Up 26 Percent In May

By Andy Meek

Shelby County’s mortgage market continued heating up in May, and when combined with April’s numbers makes it likely the second quarter will end up well above where things stood at this time last year.

Last month’s total purchase mortgage volume stood at $174.4 million, up from May 2015’s total of almost $139 million – a 26 percent improvement. That’s according to real estate information company Chandler Reports,

That 26 percent improvement comes off April’s purchase mortgage volume gain of 31 percent.

May saw 960 mortgages made, up from 783 during May 2015. And May’s purchase mortgage volume of $174.4 million was an improvement over volume of a little more than $168 million in April.

Taking a broader look at the market, year to date through the end of May purchase mortgage volume stood at $664.3 million, up 18 percent from $561.5 million at the same time last year.

At Landmark Community Bank, CEO Jake Farrell is bullish on the local market and where things appear poised to go from here.

“Mortgage rates are still very attractive, and there’s not enough housing stock for demand,” he said. “That’s a good problem for housing values.”

The same is true at Community Mortgage Corp., where chief financial officer Mike Wells said all the trends he’s seeing “are headed in the right direction.”

“We’re seeing a great deal of positive momentum,” Wells said. “Our application pipeline is very strong. Purchase activity for us is about 90 percent of what we’re doing this year. People are out there buying homes, which is good for everybody.”

Banking and financial executives like Farrell and Wells, and assessments like that – along with numbers the mortgage market is seeing across almost all metrics – suggest a corner may have been turned among area consumers. An increasing willingness to house hunt and to put themselves on the market for a mortgage, inspired perhaps by the extended low-rate environment and the availability of credit, would suggest consumers having room on their balance sheets to add debt. And, just as important, that they no longer a hunker-down mentality about doing so.

That may counterbalance somewhat how things look on the national level. The Federal Reserve said in recent days consumers kicked off the second quarter by slowing down their rate of borrowing, though the central bank said total consumer debt still rose to a record level of $3.6 trillion in April.

That’s after consumers pushed up their debt levels by a record amount in March.

Looking at year-to-date numbers, the mortgages aren’t getting bigger in Shelby County, but there are more of them being made. Year-to-date through May, the average mortgage amount in Shelby County stood at $173,327, according to the Chandler figures. That’s a little above where things stood at this time last year, when lenders were making mortgages that averaged $172,244.

Also year-to-date, there have been 3,833 mortgages in Shelby County, up from 3,260 during the year-ago period.

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