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.