Borrowers generated 37,831 pre-approval letters through LenderLogix’s QuickQual pre-approval platform in the fourth quarter, a decrease of 23.4% compared with the third quarter.
The average number of pre-approved borrowers per loan officer decreased to 23, down from 28.5 in the third quarter, according to the firm’s Homebuyer Intelligence Report.
The average pre-approval letter loan amount decreased slightly to $322,532, down from $388,215 in the third quarter.
The average sales price decreased to $376,436, down $446,390 the previous quarter.
The average down payment size saw a marginal increase to 14.3% – up from 13% in the third quarter.
Conventional loans remained the most popular loan type for pre-approved borrowers in the fourth quarter, though decreasing slightly to 74.3%, down from 76% in the third quarter.
FHA pre-approvals increased somewhat to 19.1%, up from from 17.9% the previous quarter.
VA (4%) and USDA (1%) maintained their share during the fourth quarter compared with the third quarter.
“The overall decrease and drop in pre-approvals was expected in Q4 as this is historically a lower-volume quarter overall,” says Patrick O’Brien, co-founder and CEO for LenderLogix, in the report. “However, the decrease in average sales price is a promising sign for affordability and may indicate a potential increase in mortgage-ready borrowers as the new year begins.”
Of the borrowers using QuickQual, the average number of days between pre-approval and loan submission held steady at 91 days in the fourth quarter.
The most prolonged duration between pre-approval and application increased by fifty-seven days to 650 – up from 593 in the third quarter.
The conversion rate from borrowers using QuickQual to loan application decreased slightly to 54%.
Borrowers generated an average of eight pre-approval letters before converting.
“Despite a large increase in the longest duration between pre-approval and application, the average duration remained the same,” O’Brien notes. “Thus, loan officers can, on the whole, expect borrowers to continue moving through the pipeline steadily and should be prepared to accommodate them.”
Photo: Blake Wheeler
