Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 107 NUMBER 51 ■ MECKTIMES.COM
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TUESDAY, DECEMBER 19, 2023
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Home-mortgage lending declines again across U.S. during third quarter as mortgage rates climb ATTOM has released its third-quarter 2023 U.S. Residential Property Mortgage Origination Report, which shows that 1.54 million mortgages secured by residential property (1 to 4 units) were issued in the United States during the third quarter, representing a 3 percent decline from the prior three-month period. That drop-off marked the ninth decline in the last 10 quarters – a string broken only by a spike during the second quarter of this year. The third-quarter downturn, which came amid increases in mortgage rates and home prices, left total residential lending activity down 26 percent from a year earlier and 63 percent from a high point hit in 2021. Lending activity resumed its extended downturn during the third quarter with a mix of gains and losses in major categories of residential lending, as growth in refinance activity was more than offset by drops in purchase and home-equity lending. The number of refinanced loans increased 5 percent quarterly, to roughly 516,500, while lending to home buyers went down 7 percent, to about 752,000. Home-equity credit lines also dipped 7 percent, to 272,000. Measured monetarily, lenders issued $482 billion worth of residential mortgages in the third quarter of 2023. That was down 4 percent from the second quarter of 2023 and 28 percent from the third quarter of last year.
Despite the third-quarter shifts, the portion of all residential mortgages represented by different kinds of loans remained roughly the same compared to the second quarter. Purchase loans still comprised about half of all mortgages issued during the third quarter, while refinance packages made up one-third and home-equity loans just under 20 percent. However, that remained far different from two years ago, when refinance deals comprised two-thirds of all activity and purchase loans just a third. “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 Rob Barber, CEO at ATTOM. “Refinance deals stood out as the lone bright spot. That seemed a bit odd given that interest rates went up, but may have stemmed from homeowners pulling cash out of their growing equity. 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.” Barber added that “the typical housing market slowdown during the Fall is likely to further reduce purchase lending in the immediate future, while borrowing by homeowners should hold fairly steady if projections for stable interest rates turn out to be accurate.”
The third-quarter lending trends took shape as home-mortgage rates increased again over the Summer, pushing up the cost of borrowing after dipping slightly in the first and second quarters of 2023. Average rates for 30-year, fixed loans rose above 7 percent, which was more than double the historically low rates from two years earlier. At the same time, an ongoing tight supply of properties for sale across the U.S. helped keep a lid on the number of buyers seeking mortgages to purchase homes.
Total lending activity decreases quarterly in almost two-thirds of nation
Banks and other lenders issued a total of 1,539,828 residential mortgages in the third quarter of 2023, down 3 percent from 1,589,359 in the second quarter of 2023. The fallback resumed a two-year run of declines that was broken only by a 22 percent spike in the second quarter of this year. The latest total also was down annually by 26 percent, from 2,077,214 in the third quarter of 2022, and 63 percent from a recent high point of 4,167,003 hit two years ago. A total of $482.5 billion was lent to homeowners and buyers in the third quarter, which was down 4 percent from
PLEASE SEE HOME-MORTGAGE ON PAGE 3
“The steep rise in pay for craft and other hourly workers, along with an earlier report of record job openings heading into November, indicate that contractors are still struggling to find enough skilled workers.” Ken Simonson, AGC.
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