Focus, Banking & Finance, and Real Estate

Healthy mortgage market may continue

West Michigan homebuyers are particularly active right now.

November 22, 2013
| By Pat Evans |
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West Michigan is in the midst of a good mortgage market with a bright future.

Dan Grzywacz described the area’s mortgage market as “healthy” with both refinances and sales trending upward from half a dozen years ago. 

Grzywacz is a senior vice president at Mortgage 1 Inc. and past president of the Michigan Mortgage Lenders Association.

Although there are no hard numbers yet, Grzywacz said, all signs point to a good year locally.

Mortgage 1 specializes in the purchase market, which makes up approximately 83 percent of its business. Its business in that market is up 22 percent from 2012, Grzywacz said.

It helps that mortgage rates hit the lowest point in history and stayed there for a significant amount of time, he said.

“They were the lowest on record — the absolute bottom,” he said. “They couldn’t have gone lower.”

Those low rates early in the year saw many people refinancing, an activity that has since dropped. Still, as the rates climbed slightly, purchases were still climbing, he said.

According to the Grand Rapids Association of Realtors, home sales are up 15 percent from 2012, along with a rise in new home starts.

Grzywacz said increasing home values and stabilizing employment have led people to the conclusion that it’s a good time to buy, denoted by a five-year high on the Consumer Confidence Index.

“West Michigan is a very stable community and there’s a lot of economic activity” Grzywacz said. “People feel much more comfortable to take the leap into a second home or buy homeownership. Borrowers are just feeling better about moving into something better suited for themselves and their families.”

He said another factor is that rental rates have continued to climb during the past five years — with a steeper increase as of late — leading people to believe it’s now cheaper to buy than rent.

“Owning is still considered a great investment,” Grzywacz said. “First-time buyers have helped drive the mortgage recovery in West Michigan.”

As mortgage numbers go up, foreclosures and mortgage delinquencies have decreased through 2012 and into 2013, he said.

“We have seen our setbacks with the foreclosure market on values. But (we) have seen a lot of recovery and gains in the past couple of years.”

There are more places to look for help too, he said. 

“There are still great programs available for first-time and move-up buyers, programs that allow zero down to very low down payments,” he said. “There are many families that can get government assistance on the state and federal level.”

The numbers, as well as discussions with industry professionals, indicate West Michigan might be ahead of the rest of the nation, Grzywacz said.

“A lot of lenders in West Michigan are really happy this year,” he said. “I still talk to a lot of lenders on the southeast end of the state, and there are a lot of negative comments about how hard it is to get a mortgage.”

Despite the hardships out of the Detroit area, Grzywacz said he recently checked out a list of the 10 Worst States for Mortgages — just to see if Michigan was on it. The Mitten State was nowhere to be found.

Indications continue to point to more improvements in the purchase market.

“The expectation in the industry is that we will see a slight uptick in mortgage rates in 2014,” Grzywacz said. “Now may be a better time to buy than risk higher prices with high interest rates.”

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