The late Lord Harold Samuel, a real estate tycoon in Great Britain, is often attributed with coining the expression, “There are three things that matter in property: location, location, location.” The “location, location, location” phrase was likely in widespread use, however, when Lord Samuel was a teenager and not quite yet a real estate mogul.
Still, there’s truth in the statement. The location of a property nearly always dictates its value. The difference between a property with a view of water and one that is flood prone often boils down to location, which can make a world of difference in value.
The same principle extends to people who work in the real estate business, including the mortgage industry. It’s easier for a mortgage originator from the Bay Area to generate more than $1 billion in loan volume than it is for an originator to do the same in North Dakota or Alaska.
While many originators are getting licensed in multiple states, and the internet is allowing for the ease of marketing and lending across state borders, many originators still focus much of their business in their backyard. This is where they’ve made their relationships with clients and referral partners.
Last year, Scotsman Guide created an inaugural State Champions list that drilled down into data from its annual Top Originators rankings — thus determining the top originator by sales volume in each of the 50 states, as well as the District of Columbia and Puerto Rico. This year, the publication renewed the ranking and expanded upon it to include the Top Women Originators in each state. Of course, women are quite frequently the top originator in their own state.
The State Champions listings is a way to celebrate some of the best in the business no matter their location. It’s a chance to highlight Sveta Cross, who works for Guaranteed Rate in Alaska and generated $47.7 million in loan volume during the 2020 production year.
There’s Scott Robinson of Gateway First Bank, who generated $115.6 million in New Mexico. Or Diana Montoya-Cortes, the top female originator in the U.S. territory of Puerto Rico, who generated $15 million in volume for Sun West Mortgage Co. Inc.
These listings also call attention to the wide number of financial institutions that employ these professionals. The mortgage originators who are the best in the business in their respective states work for national banks and regional banks, major mortgage companies and smaller specialty lenders, as well as everything in between.
These originators and the companies that employ them helped make the dream of homeownership a reality for so many people across the country. That’s something to celebrate. Enjoy the State Champions listings over these next few pages. (JD)
Rising prices don’t equate to larger investment returns
U.S. home prices continued to skyrocket in second-quarter 2021, according to Attom Data Solutions. An analysis of 195 metro areas with a population of at least 200,000 and at least 1,000 single-family home or condominium sales in the second quarter showed that the median home price rose by 10.8% from the prior quarter and by 22% on a year-over-year basis.
Sellers, however, experienced an unusual profit-margin decline during a period when the housing market usually heats up. On a quarterly basis, the profit margin on the median-priced home sale (the return on investment based on the seller’s original purchase price) declined to 44.9% in Q2 2021. Although this figure was considerably higher than the 32% profit margin recorded in Q2 2020, it was lower than the 48.4% return in Q1 2021 and marked the first time in 13 years that investment returns declined from the first to second quarter — the typical peak of the homebuying season.
Profit margins increased on a quarterly basis in only 56% of the metro areas analyzed, leading Attom Data to suggest that the housing market could be cooling. The highest profit margins in Q2 2021 were mainly recorded in Western states. Boise led the way in this category with a median return of 124.3% —meaning that someone who previously bought a home for $200,000 went on to sell it for $448,600. (NP)
Refi surge continues, rate-lock report shows
Mortgage rate-lock volumes across the nation’s 20 most-populous metro areas grew by 5.5% from June to July of this year, fueled mainly by double-digit growth for refinance rate locks, according to Black Knight.
Locks for rate-and-term refis grew by 24% while locks for cash-out refis grew by 20% month over month. Purchase mortgage locks declined by 7% from June, with Black Knight tying this decrease to ongoing inventory constraints. But the low interest rate environment — as well as the repeal of the Federal Housing Finance Agency’s adverse-market refinance fee — continued to fuel demand as the 2.99% rate for 30-year conforming loans at the end of July was 17 basis points lower than a month earlier.
The highest share of rate locks among the 20 metros analyzed occurred in Los Angeles, where 5.3% of the nation’s locked loans in July took place. Washington, D.C., New York City, Chicago and Phoenix rounded out the top five as each of these metros accounted for at least 2.9% of all locked loans during the month.
Black Knight noted that the refinance share of rate locks returned to 50% in July, the first such occurrence in five months. The average credit score for these locked loans was 731 and the average loan-to-value ratio was 73%. (NP)
Contributors: Jim Davis (JD), Neil Pierson (NP)
Verification: Krista Lowry, Brian Warr