Mortgage professionals are hoping that an uptick in home-buying will sustain industry volume as the demand for refinancings slacken.
That's the message many are taking from October figures released this week by the Washington-based National Association of Realtors, which revealed a bealthy 3.6% month-to-month increase in sales of existing homes.
Such a rise could be coming at a good time for mortgage lenders, who have seen refinancings drop in recent weeks as rates have inched up.
Randall Weber, executive vice president of Seattle Mortgage Co., is one lender who has seen an increase in purchase activity soften his landing. "We've seen a 15% to 18% pickup in purchase business in our September to November pipeline," he said.
This is consistent with the Realtors' figures, which show the West enjoying a 9.6% jump in sales in October, much of which is due to strong showings in the Pacific Northwest, according to John Tuccillo, the Realtors' chief economist.
Source One Mortgage Services Corp., Farmington Hills, Mich., has also seen its volume buoyed by purchase lending, said Lawrence Brady, senior vice president. "Refis have dropped off, blit we've been picked up by purchase business," he said.
Not every mortgage company across the country is seeing robust purchase activity.
In the Philadelphia area there has been only a slight quickening of purchase activity, and that has been mostly concentrated in new construction, according to Ron Altieri, senior vice president of Comnet Mortgage Services, Valley Forge, Pa.
Though the numbers may be encouraging, it is difficult to determine if the increase is sustainable over the coming months.
Mr. Brady believes that many of the homebuyers he's seen in recent weeks have been fence sitters who were gaivanized into action by rising rates.
"People don't like to make decisions," he said. "They have to have a catalyst, and when rates go up, it causes them to act."