Mortgage originations fell by 3% in Q3 2023, reversing a spike in Q2 and marking the ninth decline in ten quarters, according to new data from ATTOM.
Purchase and home equity lending (both -7%) induced the drop as interest rates stuck above 7% over the summer.
These declines wiped out gains in refinances, which were up 5%, the second straight quarterly increase. ATTOM attributes the refi boost to homeowners taking advantage of cash from their sky-high equity. Though some homeowners lost equity in Q3, it remained strong overall as home prices soared earlier this year, leaving Americans with plenty to borrow against.
The downturn pushed residential lending activity down 26% YOY and 63% from a high point in 2021 during the pandemic boom.
“The mortgage industry took another hit in the third quarter as the spike in residential lending during the Spring turned out to be temporary,” said ATTOM CEO Rob Barber. “Overall, the impact of higher rates and other forces working against borrowers remained striking, resulting in total loan activity still off by a remarkable two-thirds over just two years.”
Notably, lenders doled out the same portion of loans, with purchases still accounting for about half of the total. Refis made up one-third of mortgages, while home equity stayed just under 20%.
In dollars, lenders issued $482 billion worth of residential mortgages, down 4% from Q2 2023 and 28% YOY.
Read More Articles:
Are Rent-To-Own Home Agreements Worth It?
Hitting The Interest Rate Jackpot: Balancing The Benefits Of An Assumable Mortgage
Bank Of America To Pay $12M For Reporting False Data
Sign up for our free newsletter.