Morning Briefing: Mortgage originations down at start of 2016

by Steve Randall13 May 2016
Mortgage originations down at start of 2016
There was a drop in mortgage applications in the first 3 months of 2016. RealtyTrac data shows that there were 1.4 million mortgage originations on residential properties (1 to 4 units) in the US, down 12 per cent from the end of 2016 and down 8 per cent from the first quarter of 2015.

“After a surprisingly strong 2015, the mortgage refi market started running out of steam in the first quarter of 2016 despite lower mortgage interest rates,” said Daren Blomquist, senior vice president at RealtyTrac. “Meanwhile the purchase loan market continued the pattern of slow-and-steady growth that it has been following the past two years, and HELOC originations increased on a year-over-year basis for the 16th consecutive quarter, showing that borrowers are regaining both home value and the confidence needed to increasingly leverage their home equity.”

Bank of America, Wells Fargo, US Bank, JP Morgan Chase and Citizens Bank were the top 5 mortgage originators in the first quarter of 2016.

Metro areas with the biggest year-over-year percentage increase in purchase originations were Baltimore, Maryland (up 26 per cent); Tucson, Arizona (up 18 per cent); Louisville, Kentucky (up 17 per cent); Minneapolis-St. Paul (up 14 per cent); and Nashville, Tennessee (up 14 per cent).
Lawyers warning over real estate websites
Real estate firms have been hit with letters from lawyers threatening legal action concerning their websites. The issue is non-compliance with the Americans with Disability Act which requires accessibility to websites for those with disabilities.

Benjamin J. Sweet, attorney at Carlson Lynch Sweet Kilpela & Carpenter LLP in Pittsburgh told the Chicago Tribune that inaccessibility is an epidemic” and said his firm alone has sent around 25 letters to realty and home building firms demanding that their sites are made compliant with ADA or risk a lawsuit with potential large fines.

Proposed rules to make the issue of accessibility for disabled Americans is not due from the Department of Justice until 2018 despite the National Association of Realtors urging swifter clarification.
Housing affordability increases slightly
There has been a slight rise in the affordability of US homes. The National Association of Home Builders and Wells Fargo’s Housing Opportunity Index shows that lower interest rates and favorable home prices mean that 65 per cent of new and existing homes sold in the first three months of 2016 were affordable for the median income household (earning $65,700). That’s up from 63.3 per cent of homes at the end of 2015.

“This is the second consecutive quarter that we’ve seen a nationwide improvement in affordability due to favorable home prices and mortgage rates,” said NAHB Chief Economist Robert Dietz. “These factors, along with rising employment, a growing economy and pent-up demand will provide a boost for home sales in the second half of 2016.”


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