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Residential Loans Up 21 Percent Following Eight Straight Quarterly Declines; Purchase Lending Leads the Way, Spiking 29 Percent; Refinance and Home-Equity Activity Also Rise ATTOM, a leading curator of land, property, and real estate data, released its second-quarter 2023 U.S. Residential Property Mortgage Origination Report, which shows that the total number of mortgages secured by residential property (1 to 4 units) in the United States increased to 1.56 million during the second quarter of 2023. While that remained down 38 percent from a year earlier, it was up 21 percent from the first quarter of 2023 – the first such increase in two years. The turnaround resulted from across-the-board quarterly increases of 13 percent to 29 percent in purchase, refinance and home-equity lending. Total activity rose after eight straight declines that had reduced lending by two-thirds. The increase was spurred, at least partly, by a resumption in the nation’s 11-year housing market boom, which had stalled from the middle of last year into early 2023. Overall lending did remain down sharply during the second quarter compared to highs hit in 2021 right before rock-bottom mortgage rates doubled and inflation spiked, spurring a rise in economic uncertainty across the country. But even as interest rates ticked upward again during the second quarter of this year, overall home-mortgage activity included a 29 percent quarterly jump in loans granted to home purchasers, to almost 794,000, and a 14 percent increase in refinance packages, to 477,000. Home equity lines of credit, known as HELOCs, also went up in the second quarter of 2023, by 13 percent, to 285,000. Lenders issued $494 billion worth of residential mortgages in the second quarter of 2023. That remained down annually by 41 percent, but up quarterly by 23 percent. While lending revived, the portion of all residential mortgages represented by different kinds of loans changed by smaller amounts. Purchase loans still comprised about half of all mortgages issued in the second quarter of 2023, with refinance packages making up almost one-third and home-equity loans just under 20 percent. That remained far different from two years ago, when refinance deals made up two-thirds of all activity and purchase loans just one-third. The second-quarter revival in mortgage activity came amid a combination of economic forces that created conditions for increases in the number of loans American households seek. Home-mortgage rates were relatively stable, dipping back down in April toward 6 percent for a 30-year fixed-rate loan, before rising back up toward 7 percent by June. That followed a year when they had more than doubled from historically low levels under 3 percent. At the same time, the Spring home-buying season heated up after a period when home prices had fallen from mid-2022 to early 2023, inflation was easing, and the stock market was improving. All that provided more financial resources and buying power for house hunters, leading to a 10 percent jump in the national median home price in the second quarter. “Home buyers and owners alike lined back up again at the doors of mortgage lenders this Spring seeking loans of all kinds. It looks like owners took advantage of the small rate drop to refinance existing loans, while a jump in mortgages for purchasers was likely fueled by a number of forces that pushed the overall housing market to heat back up during the Spring buying season,” said Rob Barber, CEO at ATTOM. “Buyers also might have jumped back in amid worries about even more rate increases that could have price them out of a new home.” Barber added that, “Lenders certainly aren’t anywhere near as busy as they were back in 2021. And the second quarter surge could be just a momentary thing. But the upturn was significant, and a testimony to how strong the housing market remains around the country.” Total lending activity increases quarterly in more than 95 percent of nation Banks and other lenders issued a total of 1,555,469 residential mortgages in the second quarter of 2023. That was up 20.8 percent from 1,287,442 in first quarter of 2023, although still down 37.6 percent from 2,493,790 in the second quarter of 2022. The revival followed a two-year slump that had reduced total lending numbers to almost their lowest point this century. Despite the second-quarter turnaround, the latest total still was 63 percent less than the most recent high point of 4,171,212 hit in early 2021. That gap reflected eight consecutive quarterly decreases before the recent gain – the longest run of drop-offs this century. A total of $494.3 billion was lent in the second quarter of 2023, which was down 41.5 percent from $844.3 billion a year earlier, but up 23.5 percent from $400.3 billion in the first quarter of 2023. Overall lending activity remained down annually in all 197 metropolitan statistical areas around the U.S. with a population of 200,000 or more and at least 1,000 total residential mortgages issued in the second quarter of 2023. However, it increased from the first quarter to the second quarter of 2023 in 192, or 97 percent, of those metro areas. Total lending activity rose at least 15 percent quarterly in 167 of those areas (85 percent). The largest quarterly increases were in Knoxville, TN (total lending up 109.4 percent from the first quarter of 2023 to the second quarter of 2023); Sioux Falls, SD (up 49 percent); Rochester, MN (up 48.6 percent); Des Moines, IA (up 45.4 percent) and Manchester, NH (up 44.4 percent). Metro areas with a population of least 1 million that had the biggest increases in total loans from the first quarter to the second quarter of 2023 were Milwaukee, WI (up 39.8 percent); Chicago, IL (up 37.6 percent); Boston, MA (up 32.1 percent); Cleveland, OH (up 32.1 percent) and San Jose, CA (up 31.7 percent). The only metro areas with a population of at least 1 million where total lending went down during from the first quarter of 2023 to the second quarter of 2023 were Buffalo, NY (down 39.2 percent)
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