U.S. mortgage lending fell 6.7% to 1.28 million residential mortgage loans in the first quarter of 2024, the 11th decline in the past 12 quarters and the lowest since 2000, according to the latest U.S. residential mortgage loan data Provenance reports prepared by horizontal data providers to us.
The decline resulted in residential loan activity falling 4.8% compared to the first quarter of 2023 and down 69.3% since the highs in 2021, the report said. Among the culprits for the decline are tight inventory levels, rising mortgage rates and affordability challenges facing a large number of American households.
All major mortgage loan categories suffered losses, the report said.
“Purchase loan activity fell another 9.9% quarterly to about 565,000, while refinance transactions fell 1.9% to 491,000,” the report states. “Home equity lines of credit fell 9% to 222,000. In currency terms, lenders $405.6 billion worth of residential mortgage loans were issued in the first quarter of 2024.
Home purchase loans were the most common mortgage type at the start of 2024, accounting for “more than 40%,” but all loan types were changing at varying rates, resulting in an overall decrease in all residential home purchase mortgages for the third consecutive quarter.
“Given the surge in lending activity during the peak homebuying season of 2023, there is reason to hope for some improvement when second-quarter data emerges,” Attom CEO Rob Barber said in a statement accompanying the report. “But there is little sign that interest rates are falling, which could spur refinances and HELOC loans, or that the supply of homes for sale is increasing, so any growth is likely to be limited.”
The average interest rate on a 30-year fixed loan remained around 7% in the first few months of this year, keeping the cost of homeownership high for consumers and limiting mortgage lending. Just under 1.3 million residential mortgage loans were originated by banks and non-bank lenders in the first quarter of 2024, down from nearly 1.4 million in the fourth quarter of 2023.
In U.S. dollar terms, loans to homeowners were $405.6 billion in the first quarter of 2024, down from $426.1 billion in the fourth quarter of 2023 and $424.6 billion in the first quarter of 2023. , lenders issued 490,953 refinances in the first quarter of 2024, an increase of 11.3% from the first quarter of 2023 due to the “brief jump” observed last year.
HELOC loans also declined in the first quarter of 2024, but government-backed loans federal housing administration (Federal Housing Administration) and U.S. Department of Veterans Affairs (VA) increased as a percentage of all lending activity.
FHA-backed loans accounted for 210,246, or 16.5%, of all residential real estate loans originated in the first quarter of 2024, up from 15.7% in the fourth quarter of 2023 and 12.9% in the first quarter of 2023. loans, or 5.4%, among all residential mortgage loans from January to March, an increase from the previous quarter and a slight decrease from the same period last year.
