Property data curator ATTOM released its first quarter 2024 U.S. Residential Property Mortgage Origination Report, which showed 1.28 million mortgages secured by residential property (1 to 4 units) were issued during the first quarter.
That represents a 6.8 percent decline from the previous quarter. The drop-off marked the 11th in the last 12 quarters, to the lowest level since 2000.
The latest decline left total residential lending activity down 4.8 percent from a year earlier and down 69.3 percent from a high point hit in 2021. It came amid another period of rising mortgage interest rates and elevated home prices unaffordable to significant portions of households, on top of low supplies of homes for sale.
“There is reason to hope that we will see something of a turnaround when second-quarter data comes in, given the jump in lending activity that happened during the peak homebuying season of 2023,” ATTOM CEO Rob Barber said in a release. “But with little sign that interest rates are coming down, which could fire up refinance and HELOC lending, or that supplies of homes for sale are going up, any increase is likely to be limited.”
Ongoing decreases in lending activity during the first quarter resulted from losses in all major categories of residential lending, according to the report. Purchase-loan activity went down another 9.9 percent quarterly, to about 565,000, while refinance deals dipped downward by 1.9 percent, to 491,000. Home-equity credit lines slipped 9 percent, to 222,000.
Measured monetarily, lenders issued $405.6 billion worth of residential mortgages in the first quarter. That was down 4.8 percent from the fourth quarter of 2023 and 4.5 percent from the first quarter of last year, ATTOM added.
The varying paces of change among different loan types helped reduce the portion of all residential mortgages represented by purchase lending for the third straight quarter while pushing the refinance component upward. Still, purchase loans were the most common form of mortgages around the U.S. in early 2024, comprising more than 40 percent, followed by refinance packages and home-equity lending.
Home-mortgage lending took another hit in the early months of 2024 as average interest rates for 30-year fixed loans rose close to 7 percent (it has since increased). That continued to push up home ownership costs at a time when near-record home prices in most of the country already were unaffordable, or a significant financial stretch, for average wage earners. Purchase lending was further eroded amid counts of homes for sale that were less than half the levels seen five years ago.