Independent Banker - June 2021 - 54

which has led some to seek larger
homes with more outside space.
Second home purchases also have
performed better, especially in
vacation destinations and retirement
communities. According to NAR,
vacation home purchases increased
16% in 2020.
Millennials are another driving
force, transitioning from rentals to
homes as they start or grow their
families, Evangelou says. In 2020,
this generation accounted for the
largest share of homebuyers, at 37%.
Now, Gen Z buyers are starting to
move into the homebuying market,
according to NAR.
Pittsburgh-based First National
Bank (FNB) has a positive outlook. Its
mortgage banking division achieved
record production levels last year; it
made more than $3 billion in loans
compared with $2.6 billion in 2019.
" FNB expects 2021 will be another
strong year for home loan financing,
as many homebuyers are still
interested in purchasing, building
new construction, refinancing, or
taking out home equity, " says Joseph
Cartellone, executive vice president
and director of mortgage services
at FNB, the largest subsidiary of
$38 billion-asset F.N.B. Corp.
FNB saw a surge of new activity
in the first quarter of 2021. " High
buyer demand is expected to continue
throughout the year, although it may
decrease slightly as interest rates rise
slowly, " Cartellone says. That being
said, mortgage rates are expected
to remain favorable for prospective
homebuyers, whether they are buying,
building, upgrading or refinancing an
existing home, he adds.
Key housing trends to watch
The saying " A high tide lifts all boats "
aligns with what community bankers
are seeing in mortgage activity so far
this year. They report fairly consistent
demand across the board, from firsttime
homebuyers to baby boomers
buying second homes in retirement
communities. In addition, they expect
54 Q ICBA Independent Banker Q June 2021
Real estate
ups and downs
27%
Refinancing activity
2020-211
" We are anticipating
a considerable
13%
New-home mortgages
2020-211
16%
Vacation home sales
(2020)2
19%
New single-family home
sales (2020)2
25%
New single-family home
sales (2021 forecast) 2
Sources: 1 Fannie Mae, 2 National Association of Realtors
many of the housing trends that have
been prevalent over the past year to
continue in the second half of 2021.
" Because of the pandemic, many
people have spent significantly more
time at home and have been working
remotely, changing their perspective
about the role of their space and
whether it offers exactly what they
need, " Cartellone says. " This shifting
mindset could lead to decisions to
expand, renovate or move. "
Extra time at home also created an
opportunity for some to save money
on expenses like commuting and
entertainment, leaving them with more
discretionary income. First-time home
buyers may use those incremental
savings toward a down payment or
closing costs, Cartellone adds, while
others are using it to remodel.
Are there enough houses
to meet demand?
One concern is that the shortage of
for-sale inventory could constrain
the market. As of February, NAR
was reporting a two-month supply of
slowdown in refinance
originations. On the
other hand, our markets
have strong economies
and are showing a
lot of demand for
home purchases
and construction. "
-HARRY HAYES,
CLEAR MOUNTAIN BANK
Independent Banker - June 2021

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