As some of the final data comes in for the 2023 calendar year, ATTOM Data’s fourth-quarter 2023 U.S. Residential Property Mortgage Origination Report has been released finding that there were 1.35 million mortgages secured during this period, representing a 13.8% decline from the third quarter of 2023.
The fallback in completed mortgages put total residential lending activity down 16.5% year-over-year, a number which is also down 67.7% from the market’s high point during the first quarter of 2021. That period came amid another period of elevated home prices and mortgage rates along with low supplies of homes for sale.
Also, the decline in lending activity during the quarter were the result of losses in all major categories of residential lending. 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 of 2023. That was down 14.9 percent from the third quarter of 2023 and 18.6 percent from the fourth quarter of 2022. 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 percent of all activity.
Rob Barber, CEO of ATTOM Data, Comments
“Multiple powerful forces continued to conspire against the mortgage industry during the fourth quarter, slicing back huge portions of their business,” said Rob Barber, CEO at ATTOM. “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.”
One reason lending took a hit at the end of 2023 was mortgage rates, which hovered between 7-8%. This further drove up home ownership costs at a time when record home prices hindered affordability for below- and average-wage earners. Purchase lending took an additional hit from low supplies of homes for sale that helped reduce the number of properties available for potential mortgages.
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