LenderLogix reports that borrowers generated 35,008 pre-approval letters through its QuickQual pre-approval platform in the fourth quarter, a decrease of 23% compared with the third quarter.
The average number of pre-approved borrowers per loan officer decreased to 20.4, down 15% compared with 24 in the third quarter.
The average pre-approval letter loan amount in the fourth quarter decreased by less than 1% to $294,229, compared to the third quarter’s average loan amount of $295,312.
The average sales price also stayed nearly the same, increasing less than 1% to $345,351, up from from $345,031 in the third quarter.
Conventional loans remained the most popular loan type for pre-approved borrowers, with its share remaining steady at 75%. FHA pre-approvals declined incrementally to 18.5% versus 19% in the third quarter, as did VA (4%) and USDA share (1%).
“Our fourth quarter findings remain steady in comparison to the third quarter,” says Patrick O’Brien, co-founder and CEO of LenderLogix, in a release. “With the challenges homebuyers face remaining the same between the two quarters, it’s no surprise.”
“As we gear up for the spring market, it’s crucial for lenders to remain vigilant in acquiring the tools and resources essential for enhancing affordability in home buying and guiding potential borrowers through the process,” O’Brien adds.
Of the borrowers using QuickQual in the fourth quarter, the average number of days between pre-approval and loan submission decreased to 86.9 days, compared to 89.8 days in the third quarter. The most prolonged duration between pre-approval and application decreased significantly from 1,274 days in the third quarter to 612 days in the fourth quarter.
Despite this significant change, the conversion from borrowers using QuickQual to loan application increased slightly from 53% in the third quarter to 55% in the fourth quarter. Within this subset, borrowers generated an average of 8.45 pre-approval letters before converting.
“With the change in interest rates over the last quarter of 2023, borrowers are stepping off the sidelines,” O’Brien say. “Given the Federal Reserve’s announcement of several interest rate cuts to come in 2024, we can expect this kind of borrower activity to continue to rise.”