An analysis of trends by Experian, the leading global information services company, shows that mortgage originations have increased by 10 percent from a year ago. More important, a look at the most recent completed quarter shows a 29 percent increase in home purchases from the prior quarter and a decrease in the number of refinances, suggesting a sustained recovery is beginning to come from purchases. These findings and others were part of the quarterly analysis from Experian that examines real-estate trends.
“The key statistic in the real-estate market is the change in the ratios of refinances versus home purchases, with purchases making up a much greater proportion of the total origination volume,” said Alan Ikemura, senior product manager and business consultant, Experian Decision Analytics. “The data from our Intelliview product indicates that despite a 7 percent decrease from the previous quarter in refinancing activity, home purchases grew by 20 percent year over year and 29 percent quarter over quarter, and this is where we can begin to see some of the real-estate recovery taking place.”
The analysis of existing and new home sales also points to the turnaround in the real-estate market. The data shows a reduction in sales of distressed homes and an increase in conventional sales. Since last year, the sales of distressed properties from short sales and foreclosures have been reduced from 25 percent to just 15 percent, while conventional existing home sales grew by 32 percent year over year, nearly double the overall growth rate of existing home sales. Combine this with strong growth year over year from new home sales at 38 percent, and it is easy to see that the recovery could be coming from purchases.
Looking at the top metropolitan areas in terms of price appreciation and origination volume, Las Vegas, Nev.; Phoenix, Ariz.; and Atlanta, Ga., were three cities ranked in the top five for both categories. They were followed by Miami and Tampa, Fla., both in the top five for originations but not for prices, even though they had respectable double-digit price percentage increases. San Francisco and Los Angeles, Calif., also saw top-five price gains, but they were not in the top five for originations, despite their strong performance. According to Ikemura, this indicates that the areas showing the greatest recovery are those that were hardest hit during the downturn, such as Florida, Nevada, Arizona and California.
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Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”