ATTOM: Refis Post 20% Annual Increase in Q4

ATTOM Data Solutions, Irvine, Calif., reported more than 1.7 million loans originated on U.S. residential properties in the fourth quarter, down by 15 percent from the previous quarter but still up 2 percent from a year ago.

The company’s Q4 2016 U.S. Residential Property Loan Origination Report said more than 7.3 million loans were originated in 2016, up 2 percent from 2015 to the highest total since 2013. Total dollar volume of loan originations in the fourth quarter increased 8 percent from a year ago to more than $461 billion ($461,291,961,501).

Despite rising interest rates, “Refinance originations continued to post strong numbers compared to a year ago in the fourth quarter even as purchase originations decreased on a year-over-year basis for the second consecutive quarter,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “The increase in refinance originations is surprising given the rising interest rates in the fourth quarter, but many homeowners may have been trying to lock in still relatively low interest rates before those interest rates rose further.”

On the other hand, Blomquist noted, rising interest rates did seem to have a chilling effect on homebuyers using financing, as evidenced not only by the drop in purchase loan originations but also a corresponding rise in the share of cash buyers, drop in FHA buyer share and a rise in the average down payment percentage in the fourth quarter compared to the previous quarter. For the year, the median down payment for loans secured by single family homes and condos was 6.0 percent of the median sales price nationwide, the lowest down payment percentage since 2012, but still close to twice the 3.3 percent in 2006 during the last housing boom.

ATTOM reported 595,500 purchase loans secured by U.S. residential property in the fourth quarter, down 26 percent from the previous quarter and down 12 percent from a year ago–the second consecutive quarter with a year-over-year decrease following eight consecutive quarters of year-over-year increases. Total dollar volume of purchase originations in the fourth quarter was more than $161 billion, down 25 percent from the previous quarter and down 8 percent from a year ago. ATTOM reported 2,777,222 purchase loans originated in 2016, down 1 percent from 2015.

Among 99 metropolitan statistical areas with at least 2,500 loan originations in the fourth quarter, those with the biggest year-over-year decrease in purchase originations were Naples, Fla. (down 23 percent); Austin, Texas (down 20 percent); Fort Collins, Colo. (down 19 percent); San Antonio, Texas (down 18 percent); and Reno, Nev. (down 15 percent).

Counter to the national trend, 56 of the 99 metropolitan statistical areas analyzed for the report (57 percent) posted year-over-year increase in purchase originations in the fourth quarter, led by Olympia, Wash. (up 27 percent); Memphis, Tenn. (up 18 percent); Bremerton, Wash. (up 18 percent); Spokane, Wash. (up 18 percent); and Kansas City, Mo. (up 17 percent).

ATTOM reported the top purchase loan originators in the fourth quarter were non-banks Quicken Loans (14,678) and Caliber Home Loans (12,075) followed by Wells Fargo (10,826) and Fairway (9,149) and JPMorgan Chase (7,994).

The report said 883,836 refinance loans secured by U.S. residential properties took place in the fourth quarter, down 6 percent from the previous quarter but still up 20 percent from a year ago, the second consecutive quarter with a year-over-year increase. Total dollar volume of refinance originations in the fourth quarter was more than $246 billion, down 5 percent from the previous quarter but still up 27 percent from a year ago. ATTOM reported 3,357,405 refinance loans in 2016, up 4 percent from a year ago.

Among 99 metropolitan statistical areas with at least 2,500 loan originations in the fourth quarter, those with the biggest year-over-year increase in refinance originations were Olympia, Wash. (up 108 percent); Spokane, Wash. (up 77 percent); Boulder, Colo. (up 74 percent); San Diego (up 73 percent); and Eugene, Ore. (up 72 percent).

The report said 268,841 Home Equity Lines of Credit were originated during the fourth quarter, down 16 percent from the previous quarter and down 12 percent from a year ago. Total dollar volume originated in the fourth quarter was more than $53 billion, down 12 percent from the previous quarter and down 8 percent from a year ago. For the year, 1,189,867 HELOCs were originated, up 2 percent from 2015.

Among 99 metropolitan statistical areas with at least 2,500 loan originations in the fourth quarter, those with the biggest year-over-year increase in HELOC originations were Flint, Mich. (up 26 percent); Salt Lake City, Utah (up 26 percent); Birmingham, Ala. (up 24 percent); Anchorage, Alaska (up 22 percent); and Dallas-Fort Worth (up 20 percent).

ATTOM reported 128,577 loans backed by the U.S. Department of Veterans Affairs originated in the fourth quarter, down 16 percent from a record high in the previous quarter but still up 23 percent from a year ago. VA loans originated accounted for 8.7 percent of all loans originated during the quarter, down from a record high of 8.8 percent in the previous quarter but still up from 7.4 percent a year ago.

The report said 226,142 loans backed by FHA were originated in the fourth quarter, down 21 percent from the previous quarter and down 9 percent from a year ago. FHA loans accounted for 15.3 percent of all loans originated during the quarter, down from 16.4 percent in the previous quarter, and down from 17.6 percent a year ago to the lowest level in two years.