Residential, HELOC loan originations a drag on Kingsport-Bristol total


Fourth quarter Kingsport-Bristol residential property loan originations were down for the second straight quarter.  RealtyTrac’s Residential Property Loan Origination Report shows the quarterly decline at 11.7%.  The year-to-year metric shows they were 13.7% better than Q4 of 2014.

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The primary drivers of the quarterly decrease were a 24.7% drop in home purchase originations and a 17.7% quarterly decline for Home Equity Lines of Credit (HELOC).

Refinance originations posted the only Q4 quarterly gain, up 8.6%. They were also 27.7% better than Q4 2014.

Nationally, total loan originations were down 14% driven primarily by a 24% quarterly in purchase originations. It was the biggest quarterly drop in purchase origination in more than five years.

At the local level, it was the largest drop since Q1 2014.

Purchase originations account for 37.7% of all Kingsport-Bristol originations in Q4 while refinancing originations accounted for 42.2%, and HELOC originations had a 20% share. It was the second time in 2015 refi originations had a higher share than purchases.

The Q4 refinance originations were 8.6% better than Q3 and 27.7% better than they were in Q4 2014.

RealtyTrac Vice President Daren Blomquist said new mortgage rules implemented at the beginning of October likely contributed to the national decrease in purchase originations, but weakness in some local economies could also be a contributing factor, most notably in the oil-producing markets.

The oil economy wasn’t a factor in Kingsport-Bristol’s purchase origination drop. The MSA has seen strong increases in sales tax collections thanks to lower gasoline prices. It also saw a strong increase in job creation during the latter part of the year, and existing home sales have been at record levels since May last year.

Refinancing drove the local loan origination market during the recession and for much of the housing recovery period. It peaked in the last quarter of 2011 and started a declining trajectory that bottomed in Q3 2014. Since then it increased three quarters then softened in the third quarter of 2015.

Purchase originations saw a steady increase after bottoming out in Q3 2010 with only a couple of down quarters. The largest gains came in the first three quarters of last year.

HELOC originations were flat for 13 quarters but began picking up late in 2014.

Report methodology

RealtyTrac analyzed recorded mortgage and deed of trust data for single family homes, condos, town homes and multi-family properties of two to four units for this report. Each recorded mortgage or deed of trust was counted as a separate loan origination.

 

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