The mortgage market may not be cooling, but it has reversed course

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A new report from ATTOM says the number of mortgages fell sharply in the third quarter. The company says 3.59 million residential mortgages were issued during that period, up 3.2 percent from 3.48 million in the same quarter in 2020 but a decrease of 8.4 percent from 3.92 million New additions in the second quarter of 2012, the largest quarterly decline in more than a year.

The quarter-over-quarter decline followed another in the second quarter, marking the first time in more than two years that total lending declined for two consecutive quarters. It was also the first time since at least 2000 that total lending declined in both the first quarter and the second quarter of a year High season for home buying. The two-quarter decline hit both refinancing and purchase credits, and hid an increase in home equity lines of credit (HELOCs).

According to dollar volume, Lenders have spent $ 1.15 trillion of mortgages in the third quarter, a time when 30-year fixed rates stayed below 3 percent. That volume rose 10.7 percent year-over-year (from $ 1.04 trillion) but declined 6 percent quarterly from $ 1.23 trillion in the second quarter, the first quarterly decline since early 2020.

Homeowners barely refinanced 2 million apartments during the quarter, a 13 percent decrease from the previous period and a 3 percent decrease from a year earlier. This was not only the second consecutive decline, but also the largest in three years. The dollar volume of refinancing loans declined 10 percent from the second quarter of 2021 to 624.1 billion US dollars, but was still increasing 1 percent annually. While refinancing made up the largest share of lending, this share fell from 59 percent in both the previous quarter and the previous year to 55 percent in the third quarter.

The number of to buy Loans declined 2 percent from Q2 to 1.36 million units. However, this was still a plus of 17 percent. The dollar volume was down 1 percent from the second quarter to $ 482.6 billion, but was 30 percent higher than the third quarter of 2020.

Home loan, meanwhile, rose for the second quarter in a row, which was last held in mid-2019. The number of home equity lines of credit declined 9 percent annually, but rose 2 percent to around 238,500 between the second and third quarters of 2021. However, the volume of those $ 46 billion in loans in the third quarter was still 0.8 percent lower than the second quarter and 15 percent lower than the third quarter of 2020.

ATTOM said the decline in lending could or could not means the decade-long real estate boom is cooling off, but at least it reversed the patterns from early 2019 to early 2021, when total lending nearly tripled due to various forces including record-low interest rates and a pandemic that sparked a surge in home purchases in turn, has driven home prices to record highs.

“The surplus labor, which weighed on lenders for several years, contracted again in the US in the third quarter amid some emerging trends,” said Todd Teta, ATTOM’s chief product officer. “It looks more and more as if the insatiable appetite of homeowners for refinancing operations has noticeably diminished, while purchase credits have also declined. It’s too early to say whether the trends point to major changes in lending patterns or the wider real estate market boom. This is particularly important for home buying, which could indicate an impending slowdown in the real estate market. We will be paying particular attention to lending trends over the coming months. “

Total lending decreased from the second quarter of 2021 to the third quarter of 2021 in 186, or 86 percent of the 216 statistical metropolitan areas across the country with more than 200,000 residents and at least 1,000 total loans in the third quarter.


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