Mortgage Market Up 2 Percent in March

Published on: April 11, 2018

By Andy Meek, Memphis Daily News

When Financial Federal executive vice president John Loebel looks at the local mortgage market, he has a straightforward assessment: If you want to buy a home, buy it now.

“The mortgage rate trend is up, period,” he said. “With the Federal Reserve’s consistent raising of rates to control inflation, we foresee this will only continue. We wouldn’t be surprised if rates hit 5 percent next quarter. Due to these variables, we’re experiencing such a seller’s market. Countless buyers are bidding on every single home, decreasing the timeframe for negotiations and even appraisals.”

New figures out from real estate information company Chandler Reports, chandlerreports.com, put some context behind those sentiments.

Among the trends the Chandler Reports numbers show is a 2 percent increase in purchase mortgage volume in Shelby County to close out the final month of the first quarter of 2018. That percentage gain reflected a bump up in volume from $162.2 million in March 2017 to almost $165 million last month.

Look a little deeper at the numbers, though, and what becomes apparent is that lenders here have been making fewer individual mortgages but the amount of those mortgages is going up. Fewer mortgages issued in March, in other words, but people are paying more for them.

The number of mortgages themselves dropped from 946 in March 2017 to 876 last month, but the average dollar amount climbed from $171,527 to $188,350 over that same span.

“We’ve seen an increase in loan applications and purchase transactions during the first quarter of 2018, up from 2017,” says Tamara Saulsberry, mortgage loan officer in Memphis for Simmons Bank. “Consumers are buying now, as rates are starting to rise and are projected to continue. The Tennessee Housing Development Agency down payment assistance program has also played a big part in our purchase business so far in 2018.

“Inventory is low, which is driving up home values. As a result, new construction has increased. While refinance transactions have decreased year over year, it’s still a good time to refi to lower your term or consolidate debt.”

Looking ahead, Simmons – which has one branch location in Memphis and one in Collierville – is expecting mortgage volume in 2018 to be very near the $12 million it booked in 2017.

March 2018, at a glance

• Purchase mortgage volume: $165 million (compared to $162.2 million for March 2017)

• Number of mortgages: 876 (compared to 946 for March 2017)

• Avg. mortgage amount: $188,350 (compared to $171,527 for 2018)

Year to date

Meanwhile, the mortgage market in Shelby County is doing a little better, performance-wise, compared to how things looked at this same point in 2017.

Through the end of March 2017, for example, the year at that point had seen a little more than $379.5 million in purchase mortgage activity. Over the same three months in 2018, that number is already up to $411.5 million.

The number of mortgages didn’t really change – from 2,244 to 2,256 over those two year-to-date periods, in keeping with March’s trend that the number of mortgages isn’t going up while the price of them is. Lenders also are contributing to a rise in the average dollar amount of those mortgages. That number grew from $169,103 to $182,402 over the two March periods.