Despite media reports of tight money from lenders, purchase mortgage transactions continue to outnumber refinance transactions. according to Dan Green's latest issue of The Mortgage Reports.
On February, for the 8th straight month, mortgage lenders closed more loans for U.S. home buyers than for homeowners refinancing an existing mortgage. The market share statistic takes on added weight when we consider that nearly one-third of all home purchases are done with cash.
According to mortgage origination software firm Ellie Mae, which handles more than 3 million mortgage applications per year, purchase mortgage closings grabbed an additional four percentage points in market share this past February as compared to the month prior, marking the eighth consecutive month during which purchase market share climbed.
Purchase loans as a percentage of all closings have increased 25 percentage points in the past 12 months.
There are several reasons why today's purchase loans are gaining market share. The first is that home prices have steadily and slowly climbed nationwide, which has created an urgency among today's U.S. buyers.
Home values are up more than 10 percent annually in many U.S. cities going back to 2011, with values are up more than twenty percent in select cities including San Francisco, Los Angeles and Las Vegas