Mortgage originations dropped 13.8% in the fourth quarter compared with the third quarter and were down 16.5% compared with the fourth quarter of 2022, according to ATTOM’s U.S. Residential Property Mortgage Origination Report.
The report shows that 1.35 million mortgages were issued in the U.S. during the fourth quarter.
Mortgage volume has fallen in 10 of the last 11 quarters, due to elevated home prices and higher mortgage rates, along with low supplies of homes for sale, ATTOM says.
Ongoing declines in lending activity during the fourth quarter resulted from losses in all major categories of residential lending, the firm says. Purchase-loan activity went down another 18.4% quarterly, to about 618,000, while refinance deals slumped 7.9%, to 488,000. Home-equity credit lines sank 12.7%, to 241,000.
Measured monetarily, lenders issued $417.4 billion worth of residential mortgages in the fourth quarter – down 14.9% from the third quarter and down 18.6% from the fourth quarter of 2022.
The different pace of change among various loan types helped raise the portion of all residential mortgages represented by refinance packages back above one-third, although that level remained far less than where it was three years ago before interest rates started to climb above historically low levels.
Purchase loans continued to slip back below half of all mortgages but were still the most common form of mortgage. Home-equity loans dipped further below 20% of all activity.
“Multiple powerful forces continued to conspire against the mortgage industry during the fourth quarter, slicing back huge portions of their business,” says Rob Barber, CEO at ATTOM, in a statement. “There were signs during the peak buying season of 2022 that things were starting to turn around, with increases in purchase, refinance and HELOC deals. That could happen again this year as we head into this year’s peak period, especially with interest rates coming down recently. But the fourth-quarter numbers revealed continued gloomy times for lenders, no matter how you sliced the pie.”
HELOC lending fell in most markets, according to the report, declining to 240,564 loans from 275,551 loans in the third quarter.
The latest figure was down 25.6% from 323,369 a year earlier.
The latest decrease in HELOCs marked the second in a row after a brief uptick last spring.
The $43.6 billion volume of HELOC loans in the fourth quarter of 2023 was down from $48.4 billion in the third quarter, a 9.8% decline.
The latest level also was down annually, by 30.6%.
HELOCs comprised 17.9% of all loans in the most recent quarter. That was down from 20.1% in the fourth quarter of 2022 but still four times the level recorded in the early part of 2021.
Photo: Tierra Mallorca