About 1.4 million residential mortgages were originated in the U.S. during the first quarter, down 14% compared with the fourth quarter, as purchase volume slowed to a trickle, according to ATTOM’s quarterly Mortgage Origination Report.
Most of the decrease was driven by a 20% fall-off in home purchase loans, which slipped to 593,111 in the first quarter, down from 738,675 in the fourth quarter.
Refinances gained a greater share of the market – but fell by 12% quarter-over-quarter, to 580,170 loans.
Home equity credit lines dipped 5%, to 260,267, ATTOM says.
The total dollar value of loans fell to $478 billion in the first quarter, down 18% compared with from $582 billion in the fourth quarter.
In other words, there was not only a decline in borrowers but also a decline in the average loan amount.
Purchase loans now comprise 41.4% of the market, ATTOM says.
“The red-hot housing market we’ve seen over the last few years meant that most home loans were going toward new purchases, but that appears to be changing,” says Rob Barber, CEO at ATTOM. “Rather than borrowing money to buy a new property, the data shows homeowners are increasingly looking to restructure their existing mortgages or borrow equity from their homes to cover other expenses.”
“If the current trend continues, mortgage refinancing deals will soon make up the biggest share of the home loan market,” Barber adds.
Photo: Abigail