ATTOM, the land, property and real estate data provider company, recently released its Q1 2023 US Residential Mortgage Origination Report, showing that only 1.25 million mortgages secured by residential property (1 to 4 units) were originated in that periodwhich represents the lowest point since the end of the year 2000.
The figure decreased by 19% from the fourth quarter of 2022, marking the eighth consecutive quarterly decline. It is also down 56% from the first quarter of 2022 and 70% from a peak reached in the first quarter of 2021.
“Lenders saw opportunities dwindle further in the first quarteras the longest slowdown in mortgage activity in at least 20 years continued,” said Rob Barber, CEO of ATTOM.
“In a sense, it wasn’t that unusual, given that winter is usually the slow time of year for lenders. But the latest drop extends a streak that began two years ago and has taken nearly three-quarters of the housing mortgage business. Things remain uncertain for the near future, with the potential for interest rates and inflation to go either way.but the spring shopping season will be a key indicator of whether things can change,” Barber explained.
According to the report, the general drop in mortgage activity continues reflecting a combination of economic forces that have helped stem the boom in the real estate market in the nation for a decade and, by extension, have hurt the mortgage industry: “Those forces include mortgage rates doubling last year, high consumer price inflation, a historically tight supply of homes for sale, and a wide economic uncertainty. They have combined to make refinancing or home equity loans much less attractive, while raising the cost of home ownership and limiting purchases.”
During a period when average interest rates stood at double what they were a year earlier, lenders issued just $388 billion worth of residential mortgages in the first quarter of 2023. That was a 20% quarterly reduction and a 58% annual reduction..
General activity included 595,253 loans made to homebuyers in the first quarter of 2023down 19% from Q4 2022 and down 44% from Q1 2022 to the lowest point since early 2014. Mortgage purchase dollar volume fell 18% quarterly and 45% year over year, to $216 billion .
The largest quarterly declines occurred in Buffalo, NY (total loans decreased 47.6% from Q4 2022 to Q1 2023); Albany, New York (46.4% fewer); Toledo, OH (43.5% less); Knoxville, TN (42.7% less) and St. Louis, MO (39.1% less).
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