Tri-Cities home loans reach an all-time high

“The home-loan industry got even busier in the third quarter of 2020, with the housing market still operating as if the recession brought on by the pandemic didn’t exist. Buyers and owners, lured by low mortgage rates, kept lining up for loans at levels not seen in more than a decade,” said Todd Teta, chief product officer at ATTOM Data Solutions. “The one difference in the third quarter was that purchase lending beat out refinance activity for the first time in more than a year. However, we do cautiously note again, as we have with other recent market reports, that the pandemic and other factors could come together and halt the market boom. In the meantime, the third quarter stands out as another banner quarter for lenders.”

Nationwide refinance activity continued to represent the majority of home loans and kept growing, but at a smaller quarterly pace than purchase lending. The same was true for the local market.

Tri-Cities consumers launched almost 4,000 home loans during  Q3 – an all-time high. That’s a 13% increase from Q2 and a 32.1% increase from Q3 last year.

Nationwide loans were up 17% from Q2 and 45.1% from Q3 last year, according to ATTOM Data Solution’s Residential Property Mortgage Origination Report.

Local purchase originations lagged the refi market for the fourth straight quarter as homeowners took advantage of record-low rates. And while the pattern for new loans was similar for the region’s two Metropolitan Statistical Areas (MSA), there was no variance in loan originations.

Kingsport-Bristol (Hawkins and Sullivan counties in NE Tenn. and Scott and Washington in SW Va.) has recorded more purchase loans than the Johnson City MSA in all but one quarter since 2016 when the market began its current record-setting streak.

But that’s where the similarities end.

There was a surge in both purchase and refi originations in the Johnson City MSA (Carter, Unicoi, and Washington counties). Loan originations were 28.9% higher than Q2, and the refis were up 15.4%.

Loans were up 19% in Kingsport-Bristol, and refis were .02% higher.

While purchase and refinancing increase, home equity lending (HELOCs) continued declining across the nation. In the Kingsport-Bristol market, where they 1.6% lower than they were during the second quarter. The Johnson City metro market provided the local contrast. HELOCs increased 11.5% from the Q2 total.

David Hamilton, president of the Tri-Cities Mortgage Brokers Association, says much of the increase in purchase loans is people looking to relocate to the Tri-Cities area. “I’m shocked at the number of people trying to move to our area,” he said.

Like Realtors and builders, some local lenders are seeing their best-ever years during the pandemic. However, much of the refinancing action is done online instead of with local lending shops.

So far this year, there have been 1,628 home loan originations in the Johnson City metro area, up from 1,483 during the same period last year. During the same time frame, 2,249 home loans originated in Kingsport-Bristol compared to 1,959 during the first nine months of last year.

There have been 2,103 refi loans in the Johnson City metro area so far this year, up from 1,132 last year. Refi loans total 2,375 in the Kingsport-Bristol metro area compared to 1,511 last year.

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