Guaranteed Rate: 3Q purchase volume up 10% from last year

Refinance volume sees steep drop

Guaranteed Rate released its summary of U.S. mortgage trend snapshots as of the third quarter of 2014, showing that purchase volume rose to 73% in the third quarter of 2014, up from 63% in the third quarter of 2013. Total refinancing volume dropped by more than a third year-over-year.

Adjustable-rate mortgages have continued to rise year-over-year, taking up 13.2% of all loan volume in the third quarter of 2014.

“While ARMs tailed off slightly from the second quarter of 2014 (where they made up 16% of all loans), the continued, steady year-over-year increase in the share of the total volume indicates that home buyers are growing more and more comfortable with this option,” the report stated.

Housing prices trended upward, with the median purchase price rising 8.1% over the third quarter of 2013, and increasing 2.2% over the second quarter of 2014.

According to the report, 30-year fixed mortgages remained “far and away" the most popular loan product. It accounted for 75% of total loan volume, up one percentage point from 2013.

On the other hand, 15-year fixed loans dropped to 8% in the third quarter of 2014 from 12% in the third quarter of 2013, the second consecutive quarter that has seen a similar year-over-year decline.

The report from Guaranteed Rate included local mortgage trends in Chicago, New York City, Southern California and Boston. Here are the cities that grew the most in each area:

  • Of the four, New York City had the most growth in purchase volume, growing from 62% in the third quarter of 2013 to 75% for the same period of 2014.
  • New York City also showed the most growth in ARMs, with 25% of all loan volume in the third quarter of 2014, up from 18% in 2013.
  • Chicago grew in median home prices 10% year-over-year, the third consecutive quarter the city has had double-digit percentage increases. Boston also experienced growth in this area at 10% year-over-year.

As for 30-year and 15-year fixed mortgages, Southern California’s 30-year fixed mortgage volume declined from 77% to 73% of all loans. New York City’s 30-year fixed mortgage remained steady at 67%, but its 15-year fixed mortgage volume dropped to 5% of all loan volume from 11%.

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