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Q1 Mortgage Lending Falls to 20-Year Low

ATTOM Data has released its latest first-quarter Residential Property Mortgage Origination Report, which overall reported that 1.25 million mortgages were secured by residential properties (under four units) in the United States, the lowest point since late 2000. This figure was down 19% from the previous quarter, now marking the eighth consecutive quarterly decrease. It also was down 56% from the first quarter of 2022 and 70% from a peak reached in the first quarter of 2021. 

According to ATTOM, the ongoing decline in residential lending resulted from another round of downturns in both the refinance and purchase loan activity as well as the second straight quarterly drop-off in home-equity lending. This was caused by elevated mortgage rates, consumer price inflation and other signs of economic uncertainty. 

During a period when average interest rates remained double what they were a year earlier, lenders issued just $388 billion worth of residential mortgages in the first quarter of 2023. That was down quarterly by 20% and annually by 58%. 

Overall, activity included 595,253 loans granted to home purchasers in the first quarter in 2023, down 19% from the previous quarter and 44% year-over-year, the lowest point since early 2014. The dollar volume of purchase mortgages dropped 18% quarterly and 45% annually, to $216 billion. 

In terms of refinances, only 407,956 mortgages were rolled into now ones, the smallest amount this century. That was down 18% quarterly, 73% annually and 85% from the first quarter of 2021. The value of refinance packages was down 21% from the prior quarter and 74% annually, to $127 billion. 

Home-equity lending also went down, dropping 23 percent in the first few months of 2023, to a total of 245,071. The decline marked the second quarterly decrease following a year and a half of gains. 

"Lenders saw opportunities dwindle even more during the first quarter as the longest slowdown in mortgage activity in at least 20 years continued," said Rob Barber, CEO at ATTOM. "In one sense, it wasn't that unusual, given that wintertime is usually the slow time of the year for lenders. But the latest slide extends a run that started two years ago and has carved away nearly three-quarters of the home-mortgage business. Things remain uncertain in the near future, with the potential for interest rates and inflation to go either way, but the Spring buying season will be a key indicator of whether things may turn around." 

Click here to view the report in its entirety, including metro-level breakdowns. 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at [email protected].

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