Thursday, April 17, 2014

Home loan payoffs in Colorado fall to five-year low


The number of home loans paid off in Colorado fell 49 percent from the first quarter of 2013 to the first quarter of 2014, a decline partially fueled by increasing mortgage rates during the second half of 2013. According to a new report released today by the Colorado Division of Housing, public trustees in Colorado released a total of 50,128 deeds of trust during the first quarter of 2014, which was the lowest quarterly total recorded in any quarter since the Division began collecting quarterly totals in 2008. 98,321 deeds were released during the first quarter of last year.

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. Decreases in release activity occur as refinance and home-sale activity decreases, and rising release totals typically indicate increases in the demand for home loans and real estate.

Release activity also fell from the fourth quarter of 2013 to the first quarter of 2014, dropping 19.6 percent.  There were 62,312 deeds released during the fourth quarter of last year.

“This is the fourth quarter in a row of declines in release activity, and it looks like the most recent refinance boom is already over,” said Ryan McMaken, an economist with the Colorado Division of Housing. “Mortgage rates are still low compared to where they were in 2008, but we’ve seen some significant increases in rates since 2012.”

Trends in release activity were not uniform across the state, although all of the 21 counties surveyed reported decreases in release activity from the first quarter of 2013 to the first quarter of this year. The largest increases were reported in Broomfield and Boulder counties where release activity decreased 61.5 percent and 58.9 percent, respectively. The smallest decreases were found in Eagle and Alamosa counties where activity decreased 21.1 percent and 31.1 percent, respectively.

Adjusted for the number of existing housing units in each county, the counties with the highest rates of release activity during 2014’s first quarter were Douglas, Summit, and Weld counties. The counties with the least activity were Fremont, Pueblo and Delta counties.

“Release activity is still relatively strong in some high-income areas and places with strong employment,” McMaken said.

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 90 percent of all occupied households in Colorado are within the twenty-one counties chosen.

Wednesday, April 2, 2014

FHFA: Colorado Home Price Growth Falls Behind National Growth Rate

Colorado's House Price (Expanded-Data) Index (HPI), measured by the Federal Housing and Finance Agency (FHFA), rose 7.5 percent from the fourth quarter of 2012 to the fourth quarter of 2013. According to the fourth-quarter 2013 HPI, released last month by FHFA, the home price index for Colorado, in year-over-year comparisons, has risen for the eighth time in a row, fell to the lowest year-over-year growth rate seen in five quarters. Looking at the past two years overall, however, growth rates are the highest seen since the dot-com boom of the late 1990s in Colorado.

The Colorado HPI is now about even (up 0.03 percent) with the previous peak, reached during 2006.  The national index is still down 15 percent from its peak, which it also reached during 2006.

The HPI for the United States rose 7.7 percent from the fourth quarter of 2012 to the fourth quarter of 2013, and is the seventh quarter in a row of year over year index increases.

The first graph shows the Colorado HPI compared to the US HPI since 2000. Since the peak period, the US HPI has fallen farther than the Colorado index. The Colorado index turned up significantly during the second quarter of 2012, has moderated over the past quarter.




In the second graph is shown the year-over-year change in the HPI for both Colorado and the US. This more fully shows to what degree the HPI has fallen in recent years for both Colorado and the US. The national HPI has fallen farther -or increased less- than the Colorado HPI in every quarter since the second quarter of 2007. The home price index in Colorado has been increasing longer than the US as a whole, although Colorado showed less growth than the nation in the index from 2001-2007.

Notably, the Colorado HPI growth rate fell below that of the nation during the fourth quarter of 2013. This followed seven quarters of the Colorado growth rate significantly outpacing the national rate. Although Colorado economic indicators repeatedly showed Colorado outpacing the nation during 2012, we have seen several economic indicators (such as the Coincident Index) suggesting that Colorado's growth has moderated and as of 2012 was similar to national growth rates, or slightly below.




The index values presented and analyzed in this article are not seasonally adjusted.

Note: During the second quarter of 2011, the Federal Housing and Finance Agency released, for the first time, its Expanded-Data House Price Index. The new index is "Estimated using Enterprise, FHA, and Real Property County Recorder Data Licensed from DataQuick[.]"

In other words, the data source is much more broad than the old index which relied only on GSE information.

However, at the metro-area level, we'll still need to rely on the older GSE-data index until FHFA expands its new index into the metro areas.

FHFA: Metro Denver, Boulder, and Ft. Collins-Loveland Show Biggest Home Price Gains

The House Price Index (HPI) rose from the fourth quarter of 2012 to the same period of 2013 in every Colorado metro area except Pueblo.  Metro Denver, Ft. Collins-Loveland, and Boulder all reported the highest rate of increases in the home price index reported since 2001.  Greeley's growth rate was near a twelve year high. Outside these areas, home price growth was more subdued.

The fourth-quarter 2013 HPI data, released last month  by the Federal Housing Finance Agency for hundreds of metropolitan areas nationwide, showed year-over-year gains of more than five percent in all metros except Grand Junction and Pueblo, showing home prices well outpacing the US consumer price index.  The fourth quarter of 2013 marks the eighth quarter in a row in which the home price index rose year over year in metro Denver, Greeley, Boulder, and the Ft. Collins-Loveland area.

Year over year, the 1-year changes in each metro area were:
Boulder +9.3%
Colo Springs +3.1%
Denver-Aurora +10.9%
Fort Coll-Loveland +8.4%
Grand Junction +5.7%
Greeley +7.3%
Pueblo -0.1%

The first graph shows the year-over-year change in each region for each quarter. For the sake of visual clarity, the graph only shows data back only to 2007.



Over the past two years, growth in the home price index have become increasingly common, with southern and western Colorado lagging other areas. For metro areas overall, there is now a trend of growth in the home price index, however, with Pueblo and Grand Junction recently joining the other metros in reporting price gains.

The second graph shows the actual HPI values for each quarter going back to 2000. In general, the HPI began to plateau during 2007 and was declining in most areas by 2008. A big exception in the Grand Junction area which continued to increase rapidly well into 2008.



Since the peak period of the first quarter of 2007, the HPI has fallen in all regions. The following shows the change in the HPI compared to the peak period, as of the second quarter of 2013.

Boulder +8.2%
Colo Springs -6.8%
Denver-Aurora +7.6%
Fort Coll-Loveland +7.2%
Grand Junction -20.1%
Greeley -6.8%
Pueblo -11.6%

This latest report overall shows a continuation of earlier trends shows in this report. The most rapidly recovering markets are those markets with the strongest job growth: Metro Denver and Northern Colorado.
Pueblo, and Grand Junction are facing some of the highest unemployment rates in Colorado, and not surprisingly show some of the weakest growth in the home price index.

See here for other home price indices.

The index values presented and analyzed in this article are not seasonally adjusted. The data in this article is taken from the FHFA "all-transactions" data. The index is based on home price data obtained through the GSEs such as Fannie Mae and Freddie Mac