Mortgage loans fall again in the third quarter | News

ATTOM’s Residential Mortgage Report says 3.59 million residential mortgage loans were issued in the third quarter. That’s up 3% year-on-year, but down 8% from the second quarter – the biggest quarterly decline in more than a year.

The quarterly decline is also the second in a row and highlighted two unusual trends developing in the lending industry, according to ATTOM. It was the first time in more than two years that total loans had declined in two consecutive quarters. Most notably, it was the first time since at least 2000 that lending activity declined in the second and third quarters, which generally correspond to peak buying times.

This trend emerged against a backdrop of declining refinance and purchase loans, which more than offset the increase in home equity lines of credit.

“The excess work pile that plagued lenders for several years shrank again in the third quarter in the United States amid a few emerging trends,” Todd Teta, ATTOM’s chief product officer, said in a statement. “It increasingly appears that homeowners’ voracious appetites for refinancing deals have subsided considerably, while home loans have also declined. It is still too early to tell if the trends point to major changes in lending patterns or the broader boom in the housing market. But the drop is significant, especially for home purchases, which could suggest an impending slowdown in the housing market. “

Overall, with average interest rates remaining below 3% on 30-year home loans, lenders issued mortgages worth $ 1.15 trillion in the third quarter. This was up 11 percent annually, but down 6 percent on a quarterly basis.

On the refinancing side, 1.99 million home loans were rolled over into new mortgages in the third quarter, down 13% from the second quarter and 3% year-on-year. The total number of refinanced mortgages fell for the second consecutive quarter, while the quarterly decline was the largest in three years. The dollar volume of refinancing loans was down 10 percent from the second quarter to $ 624.1 billion, albeit up 1 percent year on year.

Mortgage refinancing remained the mainstay of residential lending activity in the third quarter. But that share fell to 55%, from 59% in the second quarter of 2021 and the third quarter of 2020.

The number of purchase loans also declined, with lenders issuing 1.36 million mortgages to buyers. This was down 2% per quarter, although up 17% per year. The dollar value of loans taken to buy a property fell to $ 482.6 billion, down 1% from the second quarter but up 30% year-on-year.

Mortgage loans increased for the second consecutive quarter. The home equity line of credit count, although down 9% annually, increased 2% between the second and third quarters, to about 238,500.

Banks and other lenders issued 3,591,794 residential mortgages in the third quarter. This was down 8.4% from 3,922,248 in the second quarter and up 3.2% from 3,479,655 a year ago. The quarterly decline was the second in a row, and it was the first time since at least 2000 that total lending activity declined in both the first through second quarters and from the second through third quarters of any year.

Overall lending activity declined from the second to third quarters in 186, or 86 percent, of the metropolitan areas surveyed by ATTOM. Total lending activity fell by at least 5 percent in 126 subways (58 percent). The largest quarterly declines were recorded in Pittsburgh (down 52.3%); Charleston, South Carolina (down 48.2%); Myrtle Beach, South Carolina (down 46.8%); Provo, Utah (down 39.5%) and Peoria, Ill. (down 33.9%).

Aside from Pittsburgh, the metropolitan areas with a population of at least 1 million that experienced the largest quarterly declines in total loans were Buffalo, NY (down 29.8%); Baltimore (down 20.9%); New Orleans (down 20.4%) and Atlanta (down 17.5%).

The metropolitan areas with the largest quarterly increases in the total number of mortgages were Ann Arbor, Michigan (up 122.7 percent); Des Moines, Iowa (up 70.5%); Sioux Falls, SD (up 51.5%); Yakima, Wash. (up 31.4%) and Dayton, Ohio (up 30.6%).

The only metropolitan areas with a population of at least 1 million and a quarterly increase in total mortgage loans were Jacksonville, Florida (up 5.5%); Memphis, Tenn. (up 4.3%) and Columbus, Ohio (up 2.7%).

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