Originations Up In Q2, Sending Lenders Back To Black

Mortgage lenders were back in business last quarter.

Lenders issued $494 billion worth of residential mortgages in the second quarter of 2023, up by 23% from Q1 though still down 41% YOY, according to new data from ATTOM.

Residential loans drove the increases, up 21% and breaking a streak of eight consecutive quarterly declines. Purchase loans in particular jumped 29%.

Refinance and home equity activity also spiked, up 13.8% and 12.9% QoQ, respectively.

“Home buyers and owners alike lined back up again at the doors of mortgage lenders this Spring seeking loans of all kinds. It looks like owners took advantage of the small rate drop to refinance existing loans, while a jump in mortgages for purchasers was likely fueled by a number of forces that pushed the overall housing market to heat back up during the Spring buying season,” said ATTOM CEO Rob Barber.

A spring push in demand for limited inventory sent home prices soaring, reversing a months-long trend of lags and declines.

“Lenders certainly aren’t anywhere near as busy as they were back in 2021. And the second quarter surge could be just a momentary thing. But the upturn was significant, and a testimony to how strong the housing market remains around the country,” Barber said.

Prices hit another new all-time high in July, according to the latest data from Black Knight. The P&I payment to purchase the median-priced home using a 20% down, 30-year fixed-rate mortgage rose to $2,423, a 91% increase over just the past two years.

But a healthier market could be within reach. Though active inventory shrank YOY in August, new listings saw an unusual uptick from the month prior. Market analysts still expect mortgage rates to cool through year-end, possibly shaking potential sellers out of their rate lock-in.

If current homeowners begin to come off the sidelines, inventory may rise alongside spiking demand, helping drive prices down as well.

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