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VOL. 133 | NO. 12 | Tuesday, January 16, 2018

Mortgage Market Slows in December, Up 8 Pct. in ’17

By Andy Meek

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Buoyed in part by solid numbers for 2017, bankers in Memphis like David Umsted are already looking ahead to what they foresee will be another busy year for the mortgage business locally thanks to a mix of underlying strengths for the market.

New numbers out from real estate information company Chandler Reports, www.chandlerreports.com, show that while purchase mortgage volume in December hit the typical holiday season pause, dropping off 9 percent for the month, volume was slightly up for the fourth quarter (2 percent). And for all of 2017, the market saw an 8 percent gain in purchase volume.

Orion Federal Credit Union CEO Daniel Weickenand told The Daily News in recent weeks his institution expects mortgage activity in 2018 to be at least as strong as it was in 2017, and maybe even more so. Likewise, Umsted said Triumph Bank is similarly “optimistic” about housing and mortgage activity this year.

“Mortgage rates and economic conditions continue to be very attractive, while delinquency rates remain low,” said Umsted, vice president of Triumph Mortgage. “We expect the homeownership rate in Memphis to rise as a result of job growth and an increase in disposable income due to tax relief. We continue to implement policies that will make it easier for potential homeowners to obtain mortgages to meet the demand of the local market.”

Purchase volume in Shelby County for December was just shy of $152 million, down from a little more than $166 million in December 2016. And while the number of mortgages themselves also fell over those two December periods – from 925 in December 2016 to 812 last month – lenders were making bigger mortgages, on average.

The average mortgage amount last month was $187,018, up from $179,535 in December 2016.

The fourth quarter, meanwhile, paints a slightly better picture. Purchase volume from October through December 2017 topped $494 million, up from $486.9 million during the same period in 2016. Again, the dollar amount of mortgages on average was up – from $178,618 to $185,713 during that period – though the number of mortgages themselves slipped a little (2,726 to 2,662).

The way things shook out for the whole year: Purchase mortgage volume surpassed $2 billion for all of 2017, topping the more than $1.9 billion the market saw for all of 2016.

All of the numbers are strongest looking at full-year totals – the number of mortgages, the average mortgage amount and total volume all saw increases in 2017 compared to 2016’s totals.

At a glance, the key 2017 statistics showed:

• Purchase mortgage volume: $2.1B compared to $1.9B for 2016

• Number of mortgages: 11,346 compared to 10,650 for 2016

• Average mortgage amount: $182,491 compared to $180,168 for 2016.

David Waddell, president, CEO and chief investment strategist with Waddell & Associates, will be hosting his company’s latest “State of the Union” presentation in a few weeks, a run-down he gives each year not only of company performance but his thoughts on the economy and market trends. In line with the assessment from mortgage bakers that things are on an upswing, Waddell said the theme for the presentation this year will be about celebrating that things are looking up.

“Can you feel it? Animal spirits abound,” Waddell writes in the latest market commentary he distributes to clients of his Memphis-based investment firm. “Consumer sentiment sits at a 17-year high, the U.S. unemployment rate is the lowest in two decades, and even our moribund manufacturing economy has vaulted back to growth unseen since 2004.”

Translation: Housing and mortgage activity are set for another busy year in 2018 on the back of an improving economy and more consumers having more money to spend.

Chandler Reports, chandlerreports.com, is an operating unit of The Daily News Publishing Co.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 64 87 1,429
MORTGAGES 39 60 1,107
FORECLOSURE NOTICES 0 6 196
BUILDING PERMITS 92 209 3,265
BANKRUPTCIES 42 84 837
BUSINESS LICENSES 21 23 352
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0