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VOL. 132 | NO. 209 | Friday, October 20, 2017

Shelby County Mortgage Market Up 6 Percent in September

By Andy Meek

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For the average person, the end of the year means schedules get busier as the holidays approach. That’s less true, though, for mortgage lenders – it can be more of the opposite scenario, in fact.

The third quarter of 2017 is now in the books, and Shelby County’s mortgage market saw essentially no growth in the number of mortgages made. However, lenders are making higher-dollar mortgages on average compared to last year, which also pushed up volume for September.

The local mortgage market saw a 6 percent gain in purchase mortgage volume in September compared to September 2016, according to data from real estate information company Chandler Reports, chandlerreports.com, which show that mortgage volume countywide grew to almost $181 million last month from almost $170 million a year ago.

The number of mortgages made over that same period was basically flat – 969 last month, compared to 965 in September 2016. On a more optimistic note, though, last month also bucked the trend of mortgages getting smaller on average, as had been the case for several months.

Over the two September periods, the average mortgage amount grew 6 percent, from $175,767 to $186,330.

“Realtors I’ve spoken with have seen a slowdown since Labor Day, with kids back in school, fall break and a lack of inventory,” said Carol McConkey, Paragon Bank’s senior vice president of consumer banking responsible for mortgage lending and retail banking. “With the holidays approaching, the latter will tighten things even more, as people who don’t have to move will not want to do anything during the holidays.”

She added that the likelihood of a federal increase in short-term rates in December is strong, though there’s been no indication yet on how that will impact rates over the long term. For lenders themselves, meanwhile, McConkey describes the local market as “very competitive right now,” as growth slows and they try to take market share from each other.

“For Paragon, specifically, our forecast right now shows that we’ll finish the year on target with our goal,” she said. “Ninety-one percent of our pipeline is purchase business, with only about 9 percent refinance. If interest rates move higher, it will certainly take refinances out of the picture, unless it is a have-to situation for the borrower.”

Along these same lines, the top executive at First Horizon National Corp., First Tennessee Bank’s parent company, told Wall Street analysts in recent days that the economy seems more or less “steady” at the moment. Same with business itself.

“Over the next several quarters,” First Horizon National Corp. CEO Bryan Jordan said, “the loan pipelines continue to look pretty steady.”

Meanwhile, September’s numbers still represent a bit of a slowdown from the hotter month of August.

While purchase mortgage volume was up 6 percent in Shelby County last month, for example, August saw a 16 percent growth over its year-ago period.

Comparing August to September shows market cooling off slightly coming into the last quarter of the year. The number of mortgages made by lenders in Shelby County slipped from 1,212 in August to 969 last month, and volume fell from a little more than $220 million to almost $181 million.

Volume year-to-date through the end of September hit almost $1.6 billion, up 10 percent from the $1.4 billion in volume during the first nine months of 2016, according to Chandler Reports.

The average mortgage amount is also up for the nine-month period.

Lenders made 8,685 mortgages year-to-date through the end of September, up from 7,924 mortgages over the same period in 2016. Likewise, the average mortgage amount year-to-date hit $181,492 at the end of September, up from the $180,702 recorded at the same point in 2016.

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

PROPERTY SALES 23 23 1,365
MORTGAGES 21 21 1,068
BUILDING PERMITS 117 117 3,173