While everyone is trying to refinance their mortgage with HARP 2.0 and rates at historic lows, we actually had 40% of our closed loan transactions were purchases in 2011. This is almost the exact same mark we saw in 2010.
2011 was good and bad for the housing market. The bad side including purchase activity in the Midwest declined 15% from 2010; down 30% for us personally. This is due to there no longer being a Home Buyer Tax Credit in 2011. This was huge as 70% of our purchase deals in 2010 were before the tax credit expired in May. Also, the consumer confidence after the tax credit expired was substantially lower than what we are seeing now. Buyers are also saying there are fewer homes on the market right now than they’d like to see.
The good news is that our average loan size increased for 2011 as well as buyers made larger down payments. 40% of our buyers put at least 20% down on their purchases. With loan amounts increasing on FHA and Conventional loans, this tells us that appraisal concerns continue to be less of an issue as we move forward which is great news.
Our predictions for 2012 can be stated with this fact: We received more purchase lead inquiries in December of 2011 than we did for the whole 1st Quarter of 2011. It feels like the consumers have more confidence and there is definitely a buzz in the housing market going into 2012.
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