Monday, February 25, 2013

Home loan payoffs up almost 50 percent during fourth quarter of 2012

The number of home loans paid off in Colorado was up 49.1 percent from the fourth quarter of 2011 to the fourth quarter of 2012, and they were also up 29.4 percent measuring the full year of 2012 compared to 2011. According to a new report released today by the Colorado Division of Housing, public trustees in Colorado released a total of 86,816 deeds of trust during the fourth quarter of 2012, which was the highest quarterly total recorded since the third quarter of 2009, when 87,400 deeds were released.

Typically, a release of a deed of trust occurs when a real estate loan is paid off whether through refinance, sale of property, or because the owner has made the final payment on the loan. Increases in release activity occur as refinance and home-sale activity increases, and rising release totals typically indicate increases in the demand for home loans and real estate.

For the full year of 2012, releases of deeds rose to 305,141, and were at the highest level recorded since 2007 when releases totaled 327,457.

“The 30-year mortgage rate was at a record low average of 3.36 percent during 2012, and that has really helped push up refinance and purchase activity in Colorado,”said Ryan McMaken, an economist with the Colorado Division of Housing.

Trends in release activity were not uniform across the state, although 20 of the 21 counties surveyed for the study reported increases in release activity from 2011 to 2012. The largest increases were reported in Douglas and Denver counties where release activity increased 38.2 percent and 42.5 percent, respectively. The only decline for the year was in Morgan County where releases fell 9.6 percent, and the smallest increase was found in Teller County where releases rose 1.0 percent.

Adjusted for the number of existing housing units in each county, the counties with the highest rates of release activity were Douglas, Summit and Boulder counties. The counties with the least activity were Morgan, Teller and Alamosa counties.

“In many cases, the counties with the most release activity are places with lower unemployment and higher incomes,” McMaken said. “It’s easier to refinance in places like that, but release activity increased almost across the board in 2012, in even the lower-income counties.”
Totals for releases of deeds of trust are collected quarterly by the Colorado Division of Housing. This report tracks releases of deeds of trust as reported by public trustees in Colorado. The report includes twenty-one counties which are chosen based on population size and to ensure that as many regions of the state as possible are represented. More than 88 percent of all housing units in Colorado are within the twenty-one counties chosen.