Thursday, April 19, 2012

Releases of deeds of trust up 28 percent during the first quarter

The number of mortgage loans paid off in Colorado was up 2.4 percent during 2012’s first quarter compared to the same period of last year, and they rose 28.2 percent from the fourth quarter of last year to the first quarter of this year. According to a new report released today by the Colorado Division of Housing, public trustees in Colorado released a total of 74,808 deeds of trust during the first quarter of 2012, indicating a sizable increase in the amount of home purchase and refinance activity since late 2011. 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. Release activity rises as refinance and home-sale activity increases.

During the first quarter, the number of deeds of trust released this year rose over 2011’s first-quarter total of 73,025, and it was up from 2011’s fourth quarter total of 58,340. Release activity rose to a five-quarter high during the first quarter and was at the largest total recorded for any first quarter since the Division of Housing began tracking quarterly release totals during 2008.

“Release totals are up quite a bit since the middle of 2011, and this is not surprising since mortgage rates have continued to drop in recent months and home-purchase activity has begun to pick up,” said Ryan McMaken, spokesman for the Colorado Division of Housing. “Numbers are still down significantly from where they were ten years ago, but the first quarter seems to be one of the most active quarters for home loan transactions since 2008.”

According to the report, the number of deeds of trust released during the first quarter was the fourth-highest total recorded in any quarter of the past four years. The 28-percent increase in release activity since last year’s fourth quarter follows three quarters of falling mortgage rates and several months of increasing home purchase activity in Colorado.

Trends in release activity varied by county, however. From the first quarter of 2011 to the same period this year, release totals fell in ten of 21 counties surveyed. The largest year-over-year decline was found in Delta County where releases fell by 24 percent, and the largest increase was found in Eagle County where releases rose 26 percent. Release activity, when adjusted for each county’s population, tended to be the highest in mountain counties and in more affluent counties. The counties with the highest rates of release activity were Summit and Douglas counties, while Pueblo and Delta counties reported the lowest rates.

“Those counties with some of the most desirable real estate are often going to be places with the most release activity since you have more interested buyers, and it’s easier to refinance or sell if your property is in demand,” McMaken said. “Counties with mountain real estate and higher incomes tend to benefit from more demand.”

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.