Property data curator ATTOM released its second-quarter 2024 U.S. Residential Property Mortgage Origination Report, which showed that 1.62 million mortgages secured by residential property (1 to 4 units) were issued nationwide during the second quarter, representing a 23.2 percent increase over the prior three-month period.
The spike still left total residential lending activity down 1.6 percent from the second quarter of 2023 and 61.2 percent from a high point hit in 2021. But it marked the first gain in a year and boosted the number of residential loans back up close to the level from a year earlier. The rebound came amid a strong spring homebuying season and mortgage interest rates that dipped downward after months of increases, according to ATTOM.
The increase in overall lending resulted from improvements across all major categories of residential loans, especially for homebuying. Purchase-loan activity jumped 32.7 percent quarterly, to about 783,000, refinance deals rose by 10.3 percent, to about 546,000, and home-equity credit lines shot up 26.5 percent, to about 286,000.
“The mortgage industry got one of its biggest boosts in years during the second quarter, supported by a combination of the usual springtime homebuyer demand coupled with more attractive mortgage rates,” Rob Barber, CEO at ATTOM, said in a release. “However, a cautionary note is warranted, as we shouldn’t read too much into one great quarter. A similar trend occurred last spring, with lending dropping off significantly later in the year. But with interest rates settling down and projections for more cuts from the Federal Reserve over the coming months, it wouldn’t be surprising if business increased even more for lenders over the rest of 2024, or at least didn’t drop significantly.”
Measured monetarily, lenders issued nearly $533 billion worth of residential mortgages in the second quarter of 2024. That was up 27.6 percent from the first quarter and 1.1 percent from the second quarter of last year.
The varying increases among different loan types boosted the share of residential mortgages for home purchases, while reducing the proportion of refinancing loans. Purchase loans remained the most common form of mortgages around the U.S. in early 2024, comprising almost half of all mortgages, followed by refinance packages and home-equity lending.
Banks and other lenders issued a total of 1,615,281 residential mortgages in the second quarte, up from 1,311,377 in the first quarter.
The latest total was still down slightly from 1,642,100 in the second quarter of 2023 and remained far behind a recent high point of 4,167,656 hit in the first quarter of 2021. But the recent gain mostly reversed three straight quarters of declines.
A total of $532.7 billion was lent to homeowners and buyers in the second quarter of this year. That was up from $417.4 billion in the prior quarter and from $526.8 billion in the second quarter of 2023, although still less than half the recent peak of $1.3 trillion in 2021.
Overall lending activity followed a similar pattern at the metropolitan area level. The total rose from the first quarter to the second quarter of this year in 201, or 98 percent, of the 205 metropolitan statistical areas that had a population of 200,000 or more and at least 1,000 total residential mortgages issued from April through June. But it remained down from the second quarter of 2023 in 118, or 58 percent, of the metro areas analyzed.
The largest quarterly increases were in Boulder, Colo. (total lending up 106.5 percent from the first to second quarter); Honolulu, Hawaii (up 100.2 percent); Appleton, Wis. (up 63.1 percent); Sioux Falls, S.D. (up 56.8 percent) and Champaign, Ill. (up 54.7 percent).
Aside from Honolulu, metro areas with a population of at least 1 million that had the biggest increases in total loans from the first to the second quarter of 2024 were San Jose, Calif. (up 46 percent); Minneapolis (up 44.3 percent); Indianapolis (up 42.3 percent) and Boston (up 35.4 percent).
The only metro areas with enough data to analyze where lending went down quarterly were Pensacola, Fla. (down 19.8 percent); Buffalo, N.Y. (down 16.1 percent); Atlantic City, N.J. (down 2.4 percent) and Springfield, Ill. (down 1.7 percent).
Measured annually, the largest declines in total lending among metro areas with a population of at least 1 million were in San Antonio (total lending down 19.1 percent from the second quarter of 2023 to the second quarter of 2024); St. Louis (down 14.9 percent); Austin, Texas (down 13.9 percent); Dallas (down 11.5 percent) and Buffalo, N.Y. (down 11 percent).