ATTOM Reports Loan Originations Down in 4Q
Tight inventories and rising interest rates took a toll on loan originations in the fourth quarter, said ATTOM Data Solutions, Irvine, Calif.
The company’s quarterly U.S. Residential Property Loan Origination Report cited 1.9 million originated loans in the fourth quarter, down 20 percent from the previous quarter and down 19 percent from a year ago.
ATTOM reported declines across all loan types. It said 818,158 residential loans originated in Q4 were refinances, down 17 percent from the previous quarter and down 34 percent from a year ago. Purchase loans totaled 791,637, down 22 percent from the previous quarter and down 1 percent from a year ago. Home Equity Lines of Credit represented 293,570 in the fourth quarter, down 25 percent from a nine-year high in the previous quarter and down 7 percent from a year ago.
“The falloff in refinance originations continued for the third straight quarter, but purchase originations held steady compared to a year ago despite ballooning down payment amounts that make it more difficult for first-time homebuyers to compete–as evidenced by the three-year low in the share of FHA buyers,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “And while the rise in construction loans in part reflects homeowners reconstructing in the wake of Hurricane Harvey in southeast Texas, the widespread rise in construction loans in other parts of the country indicates that more homeowners are staying put and remodeling rather than trying to move up into another home that comes with a big down payment and probably a higher mortgage interest rate.”
ATTOM reported the median down payment on single family homes and condos purchased with financing in the fourth quarter fell to $18,000, down from a record high $19,100 in the previous quarter but up 20 percent from $14,950 in Q4 2016. It represented 7.1 percent of the median sales price of the homes purchased with financing during the quarter, down from a four-year high OF 7.3 percent in the previous quarter but still up from 6.2 percent in Q4 2016.
Among 143 metropolitan statistical areas analyzed for down payments, those with the biggest median down payments were San Jose, Calif. ($268,000); San Francisco ($174,500); Santa Rosa, Calif. ($123,450); Los Angeles ($119,800); and Ventura, Calif. ($107,000).
The report said residential loans backed by FHA accounted for 12.0 percent of all residential property loans originated in the fourth quarter, down from 12.9 percent in the previous quarter and down from 12.3 percent a year ago to the lowest share since Q4 2014. Residential loans backed by the VA accounted for 6.6 percent of all residential property loans originated in the fourth quarter, unchanged from the previous quarter but down from 7.6 percent in Q4 2016.
ATTOM reported 29,357 construction loans backed by residential real estate (1 to 4 units) originated in the fourth quarter, up 12 percent from the previous quarter and up 33 percent from a year ago to the highest level since Q3 2015.
