Sunday, January 31, 2016

Colorado continued to outperform nationwide job market in late 2015

Colorado's unemployment rate has been below the national rate since 2012. As the Colorado economy has begun to outpace the national economy in recent years, this gap has grown.

As of December 2015, the national unemployment rate was 4.8 percent, while it was 3.3 percent in Colorado.

Indeed, unlike the US unemployment rate, the Colorado rate has returned to its pre-crisis levels last seen in 2007.

Oil extraction activity has certainly been a factor here, and we have not yet seen any effects of closing oil operations as the price of oil has fallen. We may know more after we've seen February's employment data.

How Colorado performs compared to the nation overall, and to other states will also continue to affect the decision of out-of-state residents to migrate to Colorado. As I noted here, Colorado has outpaced most states in in-migration in the past year.

With job trends like these, it's not surprising that many have elected to recently move to Colorado from other states:

Home loan payoffs in Colorado up 40 percent through third quarter of 2015

The number of mortgage loans paid off in Colorado was up 37.7 percent during 2015’s third quarter compared to the same period of 2014. Payoffs also rose rose 13.6 percent from the second quarter of 2015 to the third quarter of the same year. 

Public trustees in Colorado released a total of 89,618 deeds of trust during the third quarter of 2015, up from 2014's third-quarter total of 65,094.  

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 generally rises as refinance and home-sale activity increases, and thus can be viewed as an indicator of real estate loan activity, including home refinance activity. 

Release activity rose to a nine-quarter high during the third quarter, and was the third quarter in a row during which release activity increased. 

Comparing the first three quarters of each year combined, we find there were 166,205 releases during the first three quarters of 2014, compared to 233,135. That's a year-over-year increase of 40.3 percent. 

Looking at annual totals, we find that 2015, as of the third quarter, is on pace to exceed 2014's totals by a comfortable margin:

Trends in release activity varied by county, however. For the first three quarters of 2015, compared to the same period of 2014, percent changes in release totals ranged from a 92 percent increase in Douglas County to a drop of 4.5 percent in Alamosa County:

Although there are exceptions, the counties with the highest-income households and the most expensive real estate have traditionally experienced some of the highest levels of growth in release activity since those areas contain more households and real estate that will qualify for refinance deals. 

The significant increases in release totals in 2015 point to continued increases in home refi activity and, to a lesser extent, home sales activity as well. Moreover, release activity tends to increase as mortgage rates fall.  In 2013, we saw release activity surge following a period in which mortgage rates fell below 4 percent. We are now seeing a similar surge in the wake of mortgage rates again falling below 4 percent in late 2014:

Some other issues of note: 

The third quarter of 2015 showed the largest total for the third quarter since I began collecting this data in 2008.  I break it out this way to identify any seasonal issues:

County comparisons: