ATTOM: 4Q Refinances More than Double
ATTOM Data Solutions, Irvine, Calif., reported 1.27 million refinance mortgages secured by residential property originated in the fourth quarter, up 20 percent from the third quarter and up by 104 percent from a year ago to the highest point since third quarter 2013.
With interest rates near record lows, refinance mortgages originated in the fourth quarter represented an estimated $391.3 billion in total dollar volume, up 19 percent from the previous quarter and up 138 percent from a year ago to the highest level since first quarter 2013.
Total residential loan originations rose by 40 percent, year-over-year, in the fourth quarter to 2.27 million, the highest point since third quarter 2016.
“The fourth quarter was a banner period for residential mortgages across the United States, as declining interest rates and a strong economy helped spur more than 2 million borrowers to sign on for new or refinanced loans,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Refinancing largely drove the trend, with more than twice as many homeowners trading in higher-interest mortgages for cheaper ones than in the same period of 2018.”
Teta noted these trends could all change when the economic fallout from the coronavirus outbreak hits. “But the last few months of 2019 saw a burst of lending activity not seen in the U.S. housing market for several years,” he said.
The report said residential refinance mortgage originations increased, year over year, in 207 of the 209 metropolitan statistical areas that have a population greater than 200,000 and were analyzed for this report, including greater metro areas of New York (up 91.5 percent); Los Angeles (up 158.8 percent); Chicago (up 144.5 percent); Dallas (up 90.0 percent) and Houston (up 32.9 percent). The only metro areas that ran counter to the national year-over-year trend were Beaumont, Texas (down 6.8 percent) and McAllen, Texas (down 9.1 percent).
Lenders originated 685,898 residential purchase mortgages in the fourth quarter, down 13.3 percent from the previous quarter, but up 3.1 percent from a year earlier. Residential purchase mortgage originations increased from a year ago in 141 of the 209 metro areas that have a population greater than 200,000.
ATTOM said lenders originated 307,180 home equity lines of credit in the fourth quarter, down 8.9 percent from the previous quarter and down 5.5 percent from a year earlier. Residential HELOC mortgage originations decreased from a year ago in 56.5 percent of metropolitan statistical areas.
The report said mortgages backed by FHA accounted for 294,206, or 13 percent, of all residential property loans originated in the fourth quarter, down from 289,593, or 13.2 percent, of all loans in the previous quarter, but up from 199,004, or 12.3 percent of all loans, a year ago. Residential loans backed by the U.S. Department of Veterans Affairs (VA) accounted for 9.1 percent of all residential property loans originated in the fourth quarter, the highest percentage since at least 2000. The figure was up from 8.7 percent in the previous quarter and from 6.3 percent a year ago.