January 22, 2021
What a crazy year we experienced! New mortgage recordings hit a high not seen since 2004 and 2005 when new construction boomed and anyone that could fog a mirror qualified for a no down payment sub-prime mortgage. The effect of rising home prices is clearly evident by the steady increase in average loan amounts. (chart page 8) More evidence of such is the doubling of owner-occupied sales over $200,000 in the last six years. (chart page 19)
The purchase market as evidenced by deed recordings cratered in May after we all stayed at home in April only to rebound twice in the last seven months and finish with an annual total about the same as each of the previous four years. (see charts pages7 & 15) This supports my personal theory that until there is a change in the City of Bloomington’s restrictive work force housing development policies, the resulting low inventory will cap the purchase market at around 2600 sales per year. Even a moderate weakening of demand won’t change that much. Sellers may experience fewer multiple offer situations, but there’ll still be enough buyers to support this level of activity.
I am excited for 2021 and the promise it holds to be very good for mortgage originations. While the number of refinances may drop off over the course of the year, the consistently good purchase market will keep us all busy.
Thank you for all your support and kind words through the ups and downs of 2020. Our team is well prepared for 2021 and will continue to make your closing experience outstanding!
~ John Bethell