The real estate market has gained momentum, with mortgage originations up 10% year-over-year in the second quarter of 2013, according to an analysis by Experian. The quarterly increase in home purchases is even more notable: They’re up 29% since the first quarter of 2013.
Experian found that home purchases grew 20% year over year, despite a decrease in refinancing activity. Alan Ikemura, senior product manager and business consultant at Experian Decision Analytics, explained the significance in a news release:
“The key statistic in the real-estate market is the change in the ratios of refinances versus home purchases, with purchases making up a much greater proportion of the total origination volume.”
Of the $478 billion in new mortgages last quarter, refinances accounted for 64% and purchases comprised 36%.
Rebounding Real Estate
Further supporting the notion of recovery, the share properties sold by way of short sales and foreclosures decreased 10 percentage points from last year, making up 15% of sales. New home sales accounted for 38% and existing home sales 32%.
Meanwhile, delinquencies have continued along a downward path.
“This impressive downward trend is the result of bad loans from the first real-estate bubble being removed and replaced with post-recession conservative lending,” according to the news release.
And areas hit hardest by the economic crisis, including Florida, Nevada, Arizona and California, have rebounded best, the data indicates. Las Vegas, Phoenix, Atlanta, Miami and Tampa, Fla., reported the most originations. San Francisco and Los Angeles made the top five for price appreciation, as did Las Vegas, Phoenix and Atlanta.
Along with growth in home prices, home equity lines of credit (HELOCs) jumped 30% since the first quarter, up 10% year-over-year.
“We continue to see a very conservative lending approach, with nearly 90% of HELOCs still coming from super-prime and prime consumers,” Ikemura said. “However, there is an opportunity for more people to actually participate in getting a home-equity line because of home price improvements.”