Mortgage Activity Rises as Housing Recovers

I firmly believe the lending community and real estate industry must maintain a solid partnership since this relationship serves as the foundation of the housing recovery and its continued current upward trend. Statistics released recently by The Warren Group indicate the relationship is exceeding expectations.

According to the Warren Group, total residential mortgage activity rose almost 38 percent from 2011 to 2012 in Massachusetts. Purchase mortgages spiked more than 25 percent, and refinance mortgages rose almost 41 percent.  2012 marks the best year on record since 2007.

There is a strong foundation in place for the housing recovery, and I am extremely encouraged by these recent numbers. Right now, with the housing inventory levels at record lows, consumers who are wise enough to pull the trigger have easy access to capital. 

In addition, the federal government has announced that it will be extending the Home Affordable Refinance Program (HARP) by two years to December 31, 2015.  According to a statement released by the FHFA, the extension of this program will continue to provide borrowers opportunities to refinance, give clear guidance to lenders, and reduce risk for Fannie Mae, Freddie Mac, and taxpayers.  Approximately 2.2 million loans have gone through the HARP program since its inception in April of 2009.

According to MLS Property Information Network (MLSPIN), there are 23 percent fewer homes on the market in Massachusetts today than a year ago.  Additionally, the average price of a home for sale in Massachusetts has increased by 6 percent year-over-year.

There is serious pent up buyer demand. In addition, I firmly believe in order to keep the housing markets momentum from stalling, the appraisal industry needs to fully acknowledge the current market trend and keep up. Assets are starting to appreciate.