Mortgage originations increase by 10 percent from a year ago
Growth in home purchases and decrease in refinances suggest strength in
COSTA MESA, Calif., Sept. 19, 2013
COSTA MESA, Calif., Sept. 19, 2013 /PRNewswire/ --An analysis oftrends by
Experian,the leading global information services company, shows thatmortgage
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.
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"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," saidAlan 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
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.
Further evidence of the improving real-estate market is the significant jump
in home-equity lines of credit (HELOC) in the second quarter ofFY 2013 – the
first major jump of this kind since the recession. Growing slowly but
consistently since 2010, it increased about 10 percent last year but exploded
this quarter with a more than 30 percent increase in the quarter and year over
year. This data demonstrates an improved position for many consumers who now
have equity in their homes due to market price increases.
"We continue to see a very conservative lending approach, with nearly 90
percent of HELOCs still coming from super-prime and prime consumers," said
Ikemura. "However, there is an opportunity for more people to actually
participate in getting a home-equity line because of home price improvements.
This trend is likely to continue as we see more homeowners move into a better
The West, Midwest, South Central, South Atlantic and Northeast regions of the
United States all have shown strong year-over-year growth in HELOCs, with the
West being the standout among the group. This is attributed to the price
appreciation coming from cities like San Francisco, Los Angeles, Phoenix and
Las Vegas. The Northeast also consistently leads in HELOCs nationwide
regardless of how the real-estate market is performing in that area of the
A look at mortgage delinquencies is the final piece of the data puzzle
supporting a real-estate recovery.In this area, Experian^® continues to see a
downward trend across all the different time segments. The analysis showed
that short-term delinquencies — 30 to 59 days past due (DPD) — dropped to 1.51
percent for the quarter and have been less than 2 percent for more than a year
and a half. Midrange delinquencies — 60-89 DPD — saw a very slight 1 percent
increase for the quarter, butthey have been less than 1 percent for more than
a year and a half as well. Long-term delinquencies — 90-180 DPD — were down
1.32 percent for the quarter. This impressive downward trend is the result of
bad loans from the first real-estate bubble being removed and replaced with
postrecession conservative lending.
About the data
The data for this insight and analysis was provided by Experian's
IntelliView^SM product. IntelliView data is sourced from the information that
supports the Experian–Oliver Wyman Market Intelligence Reports and is easily
accessed through an intuitive, online graphical user interface, which enables
financial professionals to extract key findings from the data and integrate
them into their business strategies. This unique data asset does this by
delivering market intelligence on consumer credit behavior within specific
lending categories and geographic regions.
Experian is the leading global information services company, providing data
and analytical tools to clients around the world. The Group helps businesses
to manage credit risk, prevent fraud, target marketing offers and automate
decision making. Experian also helps individuals to check their credit report
and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a
constituent of the FTSE 100 index. Total revenue for the year ended March 31,
2013, was US$4.7 billion. Experian employs approximately 17,000 people in 40
countries and has its corporate headquarters in Dublin, Ireland, with
operational headquarters in Nottingham, UK; California, US; and Sao Paulo,
For more information, visit http://www.experianplc.com.
Experian and the Experian marks used herein are service marks or registered
trademarks of Experian Information Solutions, Inc. Other product and company
names mentioned herein are the property of their respective owners.
Additional sources include the Mortgage Bankers Association, the S&P/Case
Shiller Home Price Indices, the National Association of Realtors and the U.S.
Experian Public Relations
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