September 28, 2021

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Local mortgage loans at an all-time high; refi trend begins to ebb

Tri-Cities mortgage loans hit an all-time high in the second quarter of this year. At the same time, the refinancing showed the first signs of a slowdown.

There were 4,348 new loans in the seven-county tri-city region, according to ATTOM Data Solutions Q2 Residential Mortgage Lending Report. The annual performance of the local market corresponds to the national trend and outperformed the US quarterly comparison. Tri-Cities new loans increased from the first quarter. Nationwide they were down. It was the first national decline from Q2 to Q1 since 2011.

The rare quarterly decline came with the decline in refinancing activity, which paid off an increasing number of home loans. Although new local refi loans declined in the quarter, they continued to exceed purchase loans as owners continued to strive to get better interest rates.

“Demand for home loans across the country shifted significantly in the second quarter as refinancing activity declined and home purchases and equity loans increased. We haven’t seen this pattern in several years, ”said Todd Teta, ATTOM’s chief product officer. “The sharp increase in households willing to buy certainly has a lot to do with it. And we may get to the point where so many homeowners have refinanced that the need for those deals is dwindling. We’ll see over the next few months if this is a temporary rash or a real trend, which seems to be a really important point for the credit industry. “

As is so often the case, the local real estate landscape does not quite fit into the national pattern.

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Refinancing has been on the way since the final quarter of 2019 when mortgage rates began a race to bottom out. Since then, 12,253 local owners have refinanced their mortgages. During the same period, lenders issued 10,949 purchase credits. Equity loans have declined sharply since the last quarter of 2020.

The total number of mortgage loans peaked in the Greater Johnson City area in the second quarter of 2007 at 2,216 loans. Kingsport-Bristol peaked in the third quarter of 2004 with 28,805 loans.

In the second quarter, the Federal Housing Administration (FHA)-secured mortgage accounted for 9.6% of all residential home loans. That was 8.8% more than in the first quarter and 9.4% more than in the previous year.

7% of the loans in 2. That was 8.4% less than in the previous quarter and 8.8% less than a year ago.

The analysis does not break down the FHA or VA loans at the metropolitan level.

The average down payment for residential properties purchased with financing in the second quarter was $ 25,000, up 35.1 percent from $ 18,000 in the second quarter.

The report did not include the average down payment for local metropolitan areas as they did not meet the 1,000 funded single-family and condominium sales during the quarterly benchmark.

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Categories: REAL ESTATE