ATTOM: 4Q Mortgage Lending Slumps to 9-Year Low
ATTOM, Irvine, Calif., said just 1.52 million mortgages secured by residential property originated in the fourth quarter in the United States, down 24 percent from the third quarter, marking the seventh quarterly decrease in a row, and down 55 percent from a year ago, to the lowest level since 2014.
The company’s quarterly U.S. Residential Property Mortgage Origination Report said the ongoing decline in residential lending resulted from some of the largest downturns in both refinance and purchase loan activity this century along with the first drop in home-equity lending in a year. The contraction continued as the 11-year U.S. housing market boom stalled in the second half of last year amid rising mortgage rates, consumer price inflation and other signs of economic uncertainty.
During a period when average mortgage interest rates doubled to near 7 percent for 30-year fixed loans, lenders issued just $476 billion worth of mortgages in the fourth quarter, down quarterly by 27 percent and annually by 57 percent.
Within the overall activity, ATTOM reported 708,739 loans granted to home purchasers in the fourth quarter, down 26 percent from the third quarter and down 45 percent from a year ago. Dollar volume of purchase mortgages dropped 28 percent quarterly and 44 percent annually, to $257 billion.
On the refinance side, only 496,221 mortgages rolled over into new ones, down 27 percent quarterly and down 73 percent annually. Dollar volume of refinance loans was down 27 percent from the prior quarter and 73 percent annually, to $158 billion.
Even home-equity lending dropped, by 16 percent in the final months of 2022, to 313,973. The decline followed growth in five of the previous six quarters.
“The lending industry experienced a triple-dose of hits in the fourth quarter of last year as mortgage rates kept rising to levels not seen in more than 15 years and the U.S. housing market continued to stall after a decade of prosperity,” said Rob Barber, chief executive officer at ATTOM. “Rates have settled back down a bit so far this year, going back and forth in small amounts. That could lure some potential home buyers back into the market, especially if prices keep dropping. It also could spur some renewed refinance and HELOC action.”
The report said home-equity lines of credit, despite a decline, still made up one of every five mortgages in the fourth quarter of 2022, up from one of every 22 in the first few months of 2021.
