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Loans to first-time homebuyers increase

Another piece of evidence that the residential real estate market is improving is that the percentage of first-time homebuyers increased from 9% in 2011 to 11% in 2012, according to new data from ABA.

Loans to first-time homebuyers increase

The 20th annual ABA Real Estate Lending Survey, completed in February, had 261 banks nationwide participate, with roughly 85% having assets under $1 billion. Three-quarters of the respondents were stock-owned institutions and 25% were mutual or mutual holding companies. A little over 65% were commercial banks, while 33% were savings institutions.

Although foreclosure rates remain little changed at 0.98% among survey respondents, the average delinquency rate for single-family mortgage loans did come down from 2.11% in 2011 to 1.78% in 2012—another sign of improvement in the housing market, along with the decline in demand for mortgage loan workouts and other modifications.

In the commercial market, the delinquency rate was 3.31% for commercial real estate loans secured by nonfarm, nonresidential properties. Commercial real estate loan demand, while trending higher, is still constrained by the number of credit-worthy projects.

The survey also found that despite regulatory changes, adjustable-rate mortgages remain an important part of lending. For survey respondents, adjustable-rate mortgages comprised 17% of all one-to-four family mortgages in 2012. Fixed-rate mortgages continued to dominate with a little over 45% being 30-year fixed rates and 25% being 15-year fixed rates.

When it comes to sources of mortgage loan originations, retail predominates at 82%, which is a slight decrease from last year’s results. Wholesale/correspondent came in second at 8%, while the internet remained at 5%.

Looking forward, the most frequent concerns stated by survey participants regarding the mortgage market in 2013—regulatory burden and compliance costs—are unchanged from the year before.

To view the full report, please go to http://tinyurl.com/ABA-REsurvey

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