After the long, cold grip of winter, spring is in the air for Springfield area mortgage lenders.
It appears 2012 was the year of the rebound, and a couple of local lenders say 2013 is following suit. All but one of the 10 top lenders in volume posted double-digit percent growth last year compared to 2011, according to Springfield Business Journal research, and the activity appears to be providing a shot in the arm to local Realtors.
Carla Green, mortgage loan manager for Arvest Bank’s Springfield market, said loan closures – roughly 240 locally in the first quarter – were up 20 percent compared to the first three months of 2012.
Green noted a trend among loans for new purchases. About two years ago, she said refinance loans outpaced purchase loans by a three to one margin. In the first quarter, refinances were about 60 percent of mortgages, with purchase loans representing about 40 percent.
“I think we will continue to see that go up,” she said of the purchase volumes, estimating mortgage types could be split 50-50 by the end of the third quarter. “It was slowly creeping up but this year has really taken off.”
Jessica Hickok, the executive for the Greater Springfield Board of Realtors Association, said local mortgage activity is helping to tip the scales locally toward a seller’s market, and one where contractors and developers could soon be encouraged to build.
“Once we get to the six-month market, it becomes a seller’s market,” Hickok said.
As of May 14, she said the housing inventory in the greater Springfield area, which comprises Greene, Christian and Webster counties, is at 6.4 months. At that rate, it is estimated all homes currently for sale would sell in about six months and two weeks, she said. “A year ago, we were well over 14 months of inventory,” Hickock said.
She said inventory below the six-month threshold signals the market could support more homes.
According to MLS data released in mid-April, home sales were up 18 percent to 583, compared to the same month period in 2012.
Between mid-March and mid-April, the number of homes for sale was down 13.5 percent to 3,717, compared to the same time last year. The number of pending sales – those under contract – is up 35.6 percent to 793 from 585.
Ava Snyder, a Realtor with Murney Associates Realtors and the 2012 president of the Greater Springfield Board’s Multi-list Service, said she has sold 16 homes through April compared to 12 during the first four months of last year.
“This year is starting off with a bang. The market has definitely picked up,” said Snyder, a Realtor of 23 years. “Our inventory is definitely down from the previous years. What that does for the seller – it is basic economics, supply and demand – typically, you’ll see prices increase, which I know our sellers would love.”
Though there is less selection for buyers, interest rates averaging below 4 percent for 30-year fixed loans are revving the market.
“They have an opportunity to own a home as low as they could rent,” Snyder said.
A 30-year fixed loan with zero points carried an average interest rate of 3.68 percent in mid-May, compared to 5.78 percent five years ago, according to BankRate.com. A 15-year loan in today’s market averages 2.78 percent, compared to 5.35 in May 2008.
OakStar Mortgage Banking President Aaron Jernigan said while first quarter activity was flat compared to 2012, last year was a record-breaking year for the company. He said across OakStar’s Springfield and Kansas City offices, the team posted $332 million in mortgages, which was up 62 percent compared to the $205 million in loans the bank originated in 2011.
“It is obviously rate driven, but we’ve also seen a huge increase in purchase business in the first quarter,” he said.
A 30-year fixed mortgage with zero points at OakStar is going for 3.375 percent, while a 15-year loan is set at 2.625 percent. In recent years, Jernigan said the vast majority of mortgage loans have been refinances, but now new home loans are taking off.
“We’ve seen our purchase business double and almost triple compared to last year. That’s a great sign for our local economy,” Jernigan said.
Arvest’s Green said local Realtors have reported to her multiple offers are coming in on properties that might have been lucky to receive one offer a couple of years ago.
“I think they realize homes might have bottomed out on the prices, and if they are going to get in, now is the time to get in,” Green said.
Given the current environment, Hickok said she is setting the board up to launch pre-licensing courses for future Realtors by the end of the year. “We are preparing for new members,” she said.
The local Realtors board claims roughly 1,700 members, and Hickok said she expects that number to grow to 2,000 within 18 months.
