A new mortgage boom

Mortgage brokers’ boom has busted, read a headline the April 10 edition of the Dallas Morning News. The premise of the story was that abating refinance activity was squeezing new brokers out of the profession, and slowing entry into the arena, so lucrative for two-plus years, to a trickle.

They didn’t ask us.  We could have told them that mortgage activity is in fact as high as it’s ever been – right up there with the summer of 2003, widely regarded as the history-making peak of mortgage demand.

More than 1.8 million appraisal reports passed through our Mercury servers in the month of March, more than any other month except for July 2003, and it only missed the record by about 4,000, or 0.22 percent. 1,950 gigabytes’ worth of files were routed back and forth between appraisers and their clients in March, the digital equivalent of all the x-ray films in a large technological hospital.

Back in July, when more transactions passed through our servers than any other time, housing starts hit a 19-year high, but new home sales have historically been around five times smaller than existing home resales.  No other leading indicator out there would have told real estate professionals and economy watchers that new single family home sales would reach their 2003 peak in August, and existing home sales would set a record in September.

Naturally, we set our own records every month in terms of customers and lenders using our software and services, so we add to our server volume all the time by getting new people to use our servers.  Even considering that adjustment, the majority of appraisals in the United States are completed using our software, and the lion’s share of transaction volume is through our servers. (And anyway, we wouldn’t hesitate to let you know if our customer base expanded by 48.4 percent in three months – it didn’t, but our server volume did.)

Next time someone tells you the mortgage boom is fizzling, let them know it’s not.  And you’re not basing that on mortgage application volume, because applications can be denied or withdrawn, or redundant applications can be made and the best deal chosen by the borrower.  Nobody orders an appraisal till the deal is almost certainly done.  The next few months should see historic real estate activity once again.