King County and Washington State Mortgage Purchase/Refinance Mix

With rising interest rates are mortgage professionals seeing a dip in refinances and a hike in purchases? Up and coming mortgage technology/recruiting startup, Modex has interesting insights into the mortgage employment market and with that general mortgage trends utilizing raw data.

For the purpose of this analysis, we're looking at mortgage data (roughly 400k+ transactions) in Washington State over the course of February 2016 - February 2018. Specifically, we're going to be looking at two geographical areas: King County and Washington State as a whole (including King County).

King County

King County represents the majority of urban, jumbo purchase in Washington State. We recorded in excess of 125k transactions over the course of this dataset. Review the graphic above to make your own assumptions.

1. The purchase/refinance market in King County is fairly cyclical year-over-year. February 2016 we saw 62% refinance and 38% purchase. Similarly, we saw nearly the same results in February 2017 and now in February 2018.
2. The differential that is seen in the Fall is much smaller in 2017 compared to 2016. In 2016 we saw 63%-69% refinances in the Fall, while in 2017 we saw 46%-53%.
3. There appears to be a cycle of moving from refinance to purchase and then back again over the course of the year. Reports say that we are moving back towards a purchase market due to increasing interest rates. According to this data, this would be true in King County.

Washington State

In Washington State we recorded several hundred thousand mortgage transactions between late 2015 and the present. This data does include King County. Review the graphic above to make your own assumptions.

1. The largest differential was in late 2015 with a quick drive to normality in early 2016. The overall Washington State purchase/refinance market went from 73% purchase to 56% purchase in a matter of 3 months.
2. The differential between purchase and refinance is never that far off, only a maximum difference by about 30% and its much more common to have smaller differentials between purchase and refinance.
3. Although many reports claim that higher interest rates are driving us towards a purchase market, we can see that there has been a 1% increase in refinance between January and February of 2018.

Comparing King County to Washington State

When comparing King County to Washington State as a whole, we notice several differences and similarities between the two. Review the graphic above to make your own assumptions.

1. There are no 'violent spikes' in refinance and purchase business. The maximum between the two is 73% purchase and the minimum is 27% refinance. We do not see it strictly moving towards one market or another.
2. King County and Washington State seem to almost be on a backwards schedule. When King County is pushing refinance, the rest of the state as a whole is purchasing for purchase.
3. King County take much more drastic shifts in their refinance and purchase business, while Washington State as whole is much more conservative and the gap between purchase and refinance doesn't change as drastically.

Stay tuned for my next analysis on conventional versus government-backed loans and how those trends are changing in our markets! Visit Modex to learn more about what we're doing with data in the mortgage space.

What's Modex?

So, this is a nod towards our technology/mortgage startup called Modex. The aim of this article was to first and foremost provide you useful, data-rich information, but we want to talk about ourselves too. We are located in Seattle, Washington State and by utilizing data from a variety of sources we take the archaic methods of old-mortgage recruiting and bring it into the 21st century.

Think of us as a mash between Zillow (we have profiles on all loan officers to claim nationwide), Linkedin (we allow loan officers and recruiters to chat), and Match.com (we use proprietary, patent-pending algorithms to connect loan officers and employers). Visit our website to learn more, modexconnect.com or email me directly at [email protected].