The Alaska Housing Finance Corporation (AHFC) released their fourth quarter report on Alaska housing indicators. It tracks new loan activity for single-family homes and condominiums in Alaska. The data is based on a survey representing approximately 95% of mortgage lenders in Alaska, including AHFC loans. It reported 7,350 loans were originated statewide for single-family homes and condominiums for a total amount of $1.8 billion in activity. This is compared to 8,827 loans for $2.1 billion in 2010. 2011 loans were done with an average downpayment of 7% compared to 10% the prior year. This is likely a result of more people taking advantage of government programs that require a smaller downpayment.
Single-family homes accounted for 86% statewide mortgage lending activity in the 4th quarter of 2011. 54% of those loans occurred in Anchorage, the Mat-Su contributed 16% of the volume, 10% in Fairbanks, 7% in Kenai, 5% Juneau, 2% Kodiak, and 1% in Ketchikan.
Condominiums accounted for 8% of the loans, with 89% of condos being financed in Anchorage. Juneau accounted for 7% of condo loans, with the Mat-Su and Fairbanks at 1% each. Additionally, there were 541 units of multi-family housing financed by 61 loans in the fourth quarter of 2011.
There have been 610 new construction single-family homes financed in 2011, compared to 5,727 existing homes. There were 120 new construction condos financed versus 893 existing condo loans. Therefore, one in ten loans has been for new construction versus sales of existing homes or condos. 35% of the new construction was in Anchorage and 41% in the Mat-Su. Fairbanks accounted for 10% and Kenai 7%.
30-year conventional fixed interest rate mortgage loans have been getting less expensive for three decades. In 1981 they peaked at 16.6% and have undergone a slow and steady decline ever since, to under 4% in 2011, sparking a surge of refinance activity the last few years.
According to AHFC statistics there was less than $200 million in refinance loans completed per quarter in Alaska in 2006 and 2007. In 2008, the average rose to $400 million. Then in the first quarter of 2009, the activity spiked to $1.4 billion, followed by $1.2 billion in the second quarter. During this time the average 30 year interest rate declined nearly 1.5% in six months.
The refinance pace slowed somewhat in the last half of 2009, but still finished the year with $3.7 billion in refinanced mortgage loans according to AHFC statistics. In 2010, the refinance volume declined to $2.4 billion followed by $2.1 billion in 2011. This is still far above historical levels. Interest rates actually increased in the first part of the year, but have since declined again. According to the Federal Reserve, conventional 30-year mortgage rates nationwide averaged 4.76% in January of 2011 and fell to 3.96% in December.
Click here to view the full report.
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