A total of 1.54 million mortgages secured by residential property (one to four units) were issued during the third quarter, according to new data from ATTOM. This represents a 3% decline from the second quarter and the ninth decline in the last 10 quarters – the second quarter of this year was the only period where originations increased.
On a year-over-year basis, originations were down by 26% from the third quarter of 2022.
During the third quarter, the number of refinanced loans increased 5% from the second quarter to roughly 516,500 while lending to home buyers was down 7% over the same period, to about 752,000. Home-equity credit lines were also down by 7%, to 272,000. Purchase loans accounted for about half of all mortgages issued during the third quarter, while refinance packages made up one-third and home-equity loans just under 20%.
“The mortgage industry took another hit in the third quarter as the spike in residential lending during the Spring turned out to be temporary,” said Rob Barber, CEO at ATTOM. “Refinance deals stood out as the lone bright spot. That seemed a bit odd given that interest rates went up but may have stemmed from homeowners pulling cash out of their growing equity. Overall, the impact of higher rates and other forces working against borrowers remained striking, resulting in total loan activity still off by a remarkable two-thirds over just two years. The typical housing market slowdown during the Fall is likely to further reduce purchase lending in the immediate future, while borrowing by homeowners should hold fairly steady if projections for stable interest rates turn out to be accurate.”
