Mortgage Originations Look to Rise This “Selling” Season

Like many businesses the business of real estate is cyclical, with the greatest number of homes sold and mortgage origination between the months of March through September. We usually see a slow down from October through December. Then we get a traditional mini-spike up in sales right at the begining of the year when many companies relocate employees around the country. February is typically slow and then the housing and mortgage momentum begins to swell. It’s a pattern that repeats itself annually across the nation. There are always exceptions, and lately the entire State of Texas has been the exception as people continue to relocate here on any day of the week of any given month.

I am not saying that Texas hasn’t seen the seasonal slow-down at all, but it’s been at a minimum compared to the rest of the country. That’s because unlike other areas of the country which have seen a slow-down to a point that this Spring “Selling Season” the switch has gone back to a buyer’s market. That’s because inventory has increased, and mortgage interest-rates have risen to create a more balanced market.

Zillow summed it up in a recent article:

Home values in the U.S. rose just 0.2% between December and January, according to Zillow’s Home Value Index. That’s the smallest monthly increase since May of 2012. And while inventory is still low, the number of homes listed for sale on Zillow was up 11.1% annually on a seasonally adjusted basis in January, marking the fifth straight month of higher year-over-year inventory.

Inventory rose in 22 of the 35 largest metro areas in the country, Zillow reported. Some of the inventory gains came in areas that were particularly impacted by the housing meltdown, including Las Vegas (up 42.8%), Phoenix (up 30.5%) and Sacremento (up 26%). Those areas also saw price appreciation slow in January.

“Last year, tight inventory contributed to very rapid home value appreciation.  Now, more inventory is helping to moderate home value increases in many areas. This increased supply is coming from many sources, as more sellers are free to list their homes after being released from negative equity, builders continue to ramp up construction and many homeowners decide to list their homes and capitalize on recent gains,” said Zillow Chief Economist Dr. Stan Humphries. “As the market shakes off a long winter and gears up for the spring season, we should see buyers gaining a bit more leverage this year than they’ve had in the past, with more choice and less competition. This slightly more balanced market is another step on the road back to normal, and will help offset the impact of rising mortgage rates and more expensive homes for buyers.”

On the other hand, Texas is still a seller’s market, potential mortgage borrowers are reporting statewide that due to low inventories the majority of the time when a home comes on the market it is a multiple-offer situation.

Just goes to show you that real estate is a local market.

This entry was posted in News and tagged , . Bookmark the permalink.