Loan originations at a three-year low, but the first quarter of 2017 saw more first-time buyers
By Jesse Darland
CTW Features
The first quarter of 2017 saw the total dollar volume of loan originations drop 21 percent year-over-year to $347.9 billion. This is the lowest dollar volume since the first quarter of 2014 – a three-year low.
In the same period of 2017, 1.4 million loans were originated on U.S. residential properties, which is a drop of 30 percent from the previous quarter and down 21 percent from the same quarter a year ago.
These numbers come from the U.S. Residential Property Loan Origination Report released by ATTOM Data Solutions. They’re based on publicly recorded mortgages and deeds of trust collected by the company in more than 950 counties and account for more than 80 percent of the U.S. population.
“Rising mortgage rates made qualifying for a home purchase more difficult and refinancing an existing home loan less attractive in the first quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Refinance originations in particular fell off a cliff in the first quarter to the lowest level in more than 10 years after posting double-digit percentage increases in the third and fourth quarters of 2016, indicating that some refinance demand was pulled forward late last year in anticipation of rising interest rates.”
Even though purchase originations dropped sharply, the report noted encouraging signs in the data. The first quarter saw an increase in the number of first-time homebuyers, as indicated by an increase in the number of buyers using Federal Housing Administration (FHA) loans after two consecutive quarters of declines. The median down payment decreased following three consecutive quarters of increases. (Low down payments are often an indicator of first-time buyers.)
At the same time, the report found more homebuyers in the first quarter of 2017 needed help to qualify for a loan. Nearly 22 percent of all single-family purchase originations had multiple, non-married co-borrowers on the loan, up from 20 percent a year ago.
© CTW Features
