Releases of deeds of trust in Colorado metros fall to 12-month low in June

A deed of trust is "released" when a home loan is paid off. This event is recorded by the public trustee in each county in Colorado.

Trends in public trustees tell us about how much activity there is in terms of home loan refinances and home sales. In many ways, activity in releases of deeds of trust are an indicator of demand for real estate purchases in Colorado, and historically, we have seen more release activity during times of economic boom. 

Activity Through June of This Year 

In June 2017, we found that releases had fallen to a 12-month low in the 11 largest counties in Colorado, plus Broomfield County. These counties include more than 90 percent of the population of Colorado. 

In June, releases totaled 23,422. That's the lowest total since June 2016 when releases totaled 23,265. June 2017's total up down slightly from the same month a year earlier, rising 0.7 percent from June 2016's total of 23,265.

Looking at counties, individually, we find that year-over-year, the counties with the largest drops were Adams, Broomfield, and Boulder counties. The largest increases were found in Weld and Denver counties. 

Although June's total is clearly down significantly from December 2016's peak, overall activity continues to be generally robust as demand for housing and homes for purchase remains strong. Thanks to low interest rates and rising home prices, it remains relatively easy to obtain refinances for current mortgages, and home continue to sell quickly, with the possible exception of high-end homes. 

All of these factors continue to put upward pressure on release activity. 

Home Loan Payoffs Down 2.6 Percent in Third Quarter of 2016

The number of mortgage loans paid off in Colorado was down 2.6 percent during 2016’s third quarter compared to the same period of last year. Mortgage payoff rose 21.6 percent from the second quarter to the third quarter of this year. 

Public trustees in Colorado released a total of 87,192 deeds of trust during the third quarter of 2016, indicating a sizable increase in the amount of home purchase and refinance activity since the first and second quarters of this 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. Release activity rises as refinance and home-sale activity increases. 

In the first chart, we see release activity in the third quarter compared to the third quarter of last year: 

In this case, we see that Summit County and La Plata County reported the most release activity over the period, thus suggesting more sale and refi activity in those areas. The largest decreases, on the other hand, were found in Boulder County and Eagle county over the period suggesting less sales and refi activity. Overall, release activity fell in 11 counties while increasing  in 10 counties. 

The second chart shows release activity relative to the overall number of households in each county. A lower number indicates more release activity per household. 

In this case, there were only 7 households per release of deed of trust in Summit County, making it the most active county. The least active county was Pueblo County:

The third chart shows total releases for the first three quarters of this year compared to the same period last year. In this case, the largest increase was found in Alamosa County, and the largest decline was found in Eagle County. In the counties surveyed, activity fell 1.3 percent from 2015 to 2016. 

In this case, it appears some of the most expensive counties — in terms of real estate — have been experiencing some of the largest declines in activity while the largest increases are seen in the lower-cost counties such as Pueblo and Mesa. There are exceptions, however, as in the case of La Plata county, which is a relatively expensive county that is nonetheless seeing continued increases in release activity. 

Being largely driven by refi activity, release activity is sensitive to changes in mortgage rates.  In the next graph, we can see that following periods of decline in mortgage rates, release activity tends to rise. Release activity tends to fall in periods following increases in the mortgage rate: 

For example, note how release activity fell significantly during late 2013 and early 2014 following an uptick in mortgage rates during 2012 and 2013. Similarly, an increase in mortgage rates in 2015 likely contributed to a slight drop-off in release activity in early 2016. In 2016, however, mortgage rates have fallen, which helps explain the uptick in release activity during the third quarter of this year.  

Other factors are important too, however, and these include overall demand for housing, employment, and population growth. In Colorado, even in the face of increases in the mortgage rate, we often continue to see sustained real-estate transaction activity when jobs creation remains solid and population totals are steady or increasing. Overall, 2016 has seen little change from 2015 in terms of statewide release activity.

Barring a significant chance in economic conditions, this situation is likely to continue. 

(Totals for releases of deeds of trust are collected quarterly. 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.)

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: 

Releases of Deeds of Trust in Colorado Go Nowhere for Nine Months

Releases of deeds of trust during the first quarter of 2015 were up in Colorado compared to the first quarter of 2014, although release activity has been flat since the middle of 2014.

During the first quarter of 2014, there were 64,632 releases of deeds of trust in 21 Colorado counties surveyed. During the same period of 2014, there were 50,128 releases, for a year-over-year increase of 28.9 percent.

A release of a deed of trust is an event that occurs when a deed of trust (often referred to as  a mortgage) is paid off, either through refinance, sale, or when all payments have been completed on a home loan. It is a "positive" economic indicator in sense that areas with improving economies tend to generally also report increases in releases of deeds of trust. Mortgage rates tend to be a major factor in release of deeds of trust activity since release trends tend to reflect refinance and home purchase activity.

Compared with the last quarter of last year, release activity declines slightly from 65,842 to 64,632 — a decline of 1.8 percent.

As the first graph shows, however, total release activity has changed very little of the past three quarters:

The chart shows the totals for each county surveyed, with a year-over-year comparison. We see that only Alamosa County reported a decline in release activity. So, overall, we can say that real estate transaction activity has been generally increasing across the state, with the possible exception of the San Luis valley. All other regions show increases, however.

So, how does the first quarter compare? If we compare the first quarter of this year to other first quarters, we see that 2015's first quarter is about in the middle. Totals were down considerable from 2013's very high numbers, but up compared to 2009, 2010, and 2014:

Over the past three quarter, though, activity has changed little. Only Eagle County has shown a large swing in recent quarters with the rest of the counties surveyed reporting very muted changed, none of which exceed 10 percent movement in either direction:

Why so little change? What's surprising is how little release activity has moved in recent quarters in spite of new declines in the mortgage rate. Historically, release activity increases when mortgage rates fall. However, in recent quarters, we see that the 30-year conventional mortgage rate is falling with very little reaction in terms of releases. This suggests a couple of things: It tells us that loose monetary policy is having a diminished effect on real estate activity, and it also suggests that inventory is very low. Moreover, it also suggests that those who have been eligible for refinance in recent years have already done their refinancing. In other words, the households who are likely to buy new homes or refinance have already largely done so. The sorts of release activity we'd expect from a mortgage rate below four percent haven't been showing up. 

Finally, let's compare all the counties surveyed taking population size into account. If we look at the total number of households per release, we find that Summit county has the most release activity while Alamosa had the least (a lower number in the right column indicates less activity.) As is often the case, we find that mountain areas and more high-income areas show the most activity while lower-income and areas with less fashionable real estate shows less release activity. This isn't a rock-solid rule, but in general, it is often the case: 

Overall, release activity is moderate, as might be expected in relatively high-demand real estate markets as are found across much of Colorado. However, if we look at longer historical trends, we find that activity is down considerable from the days of the 2003-2007 housing bubble in spite of rock-bottom mortgage rates (2015 is 1st Q only): 

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.

Releases Report 2014 1stQ

Home loan payoffs down 28 percent during fourth quarter of 2013

The number of home loans paid off in Colorado was down 28.2 percent from the fourth quarter of 2012 to the fourth quarter of 2013, but comparing the full year of 2013 to 2012, the total was up 13.0 percent. According to a report released Wednesday by the Colorado Division of Housing, public trustees in Colorado released a total of 62,312 deeds of trust during the fourth quarter of 2013, compared to 86,816 released during the fourth quarter of 2012. 

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 generally indicate increases in the demand for home loans and real estate.

For the full year of 2013, releases of deeds rose to 344,942, and were at the highest level recorded since 2005 when releases totaled 400,565.   

“The fourth quarter of 2013 saw some big drops in release activity in response to interest rates heading up during the second half of the year," said Ryan McMaken, an economist with the Colorado Division of Housing. "There was so much refi and sales activity during the first half of the year though, that 2013 ended up being a bigger year than 2012 overall." 

Trends in release activity were not uniform across the state, although 20 of the 21 counties surveyed for the study reported decreases in release activity from the fourth quarter of 2012 to the same period of 2013. The largest decreases were reported in Boulder and Mesa counties where release activity decreased 48.1 percent and 49.1 percent, respectively. The only increase for the period was in Alamosa County where releases rose 20.9 percent, and the smallest decrease was found in Jefferson County where releases fell 7.0 percent.

Adjusted for the number of existing housing units in each county, the counties with the highest rates of release activity were Summit, Douglas, and Jefferson counties. The counties with the least activity were Fremont, Pueblo and Delta counties.

“We see a similar pattern here to what we see with many other housing indicators," McMaken said. "Metro Denver and northern Colorado's high release activity reflect a relatively high demand for real estate while other areas, such as Pueblo and Grand Junction, are showing less activity."

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.

A deed of trust is similar to a mortgage and is a lien on real property to secure payment of an indebtedness. The deed of trust contains a grant of the property to the public trustee for the benefit of the holder. The deed of trust is released when the debt is paid in full. 

A deed of trust is similar to a mortgage and is a lien on real property to secure payment of an indebtedness. The deed of trust contains a grant of the property to the public trustee for the benefit of the holder. The deed of trust is released when the debt is paid in full. 

Releases Report 2013 4thQ