About 1.64 million residential mortgages were issued in the U.S. during the fourth quarter – a decrease of 3% compared with the third quarter but up 14% compared with the fourth quarter of 2023, according to ATTOM’s quarterly mortgage ordination report.
Higher mortgage rates and low inventory that drove up home prices were the main culprits in the drop-off in total volume, ATTOM says.
Despite the annual gain in lending activity, the total number of mortgages issued remained down by nearly two-thirds from the high point hit in 2021.
Purchase volume decreased 7.5% while home equity credit lines dropped 11.6%. Refinances, however, increased for a third consecutive quarter, growing 6.4% compared with the third quarter.
Measured monetarily, lenders issued $568 billion worth of residential mortgages in the fourth quarter – up 1.4% from the third quarter and up 26.3% from the fourth quarter of 2023.
“The in-boxes of mortgage lenders emptied out a bit during the fall of 2024 following a couple of strong quarters that had pointed to a possible revival for the industry,” says Rob Barber, CEO for ATTOM, in a statement. “Things slowed down as the market remained tight and the cost of borrowing went back, all during the usual annual home-buying lull.”
“One small surprise emerged with refinances increasing again despite rising interest rates,” Barber says. “That may have happened because rates started the quarter at one of the more attractive points over the past few years, suggesting that homeowners were trying to get their mortgages reset before borrowing costs went back up.”
“Forces remain in places for lending to remain slow,” Barber adds. “But the fallback was modest, and the trend should turn back around to some degree over the coming months as the weather warms and home buying heats back up, especially if mortgage rates settle down.”
Photo: Breno Assis