A new report found the number of loans originated during the fourth quarter of 2017 dipped significantly.
According to ATTOM Data Solutions Q4 2017 U.S. Residential Property Loan Origination Report, slightly more than 1.9 million loans secured by residential property were originated in the fourth quarter, down 20 percent compared to 2017’s third quarter from and down 19 percent year-over-year.
During the quarter, 818,158 of the residential loans originated were refinance loans, down 17 percent from the previous quarter and down 34 percent from a year ago. Purchase loans in the fourth quarter (791,637) declined 22 percent from the previous quarter and 1 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,” ATTOM Senior Vice President Daren Blomquist said in a release.
“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,” Blomquist added.
ATTOM said 293,570 home equity lines of credit were originated in the fourth quarter, down 25 percent from a 9-year high in the previous quarter and down 7 percent from a year ago.
The median down payment on single family homes and condos purchased in the fourth quarter was $18,000, down from a record high $19,100 in the previous quarter but up 20 percent from $14,950 in 2016’s fourth quarter.
During the quarter residential loans backed by the Federal Housing Administration accounted for 12 percent of all residential property loans, down from 12.9 percent in the previous quarter and down from 12.3 percent a year ago. Residential loans backed by the U.S. Department of Veterans Affairs accounted for 6.6 percent of all residential property loans in the fourth quarter, unchanged from the previous quarter but down from 7.6 percent from one year ago.
ATTOM said the metropolitan statistical areas (MSAs) with the biggest year-over-year decreases in loan originations in the fourth quarter were Santa Rosa, Calif. (down 47 percent); San Jose (down 39 percent); San Luis Obispo, Calif. (down 38 percent); Denver (down 37 percent); and Boulder, Colo. (down 37 percent).
MSAs that had increases in fourth-quarter loans originations included Lexington, Ky. (up 40 percent); Raleigh, N.C. up 37 percent); Huntington, W. Va. (up 27 percent); Asheville, N.C. (up 13 percent); Davenport, Iowa (up 7 percent); Memphis (up 4 percent); Dayton, Ohio (up 3 percent); and Charleston, S.C. (up 2 percent).