In Q2, 1.62 million mortgages secured by residential property (units one to four) were issued in the U.S., according to ATTOM’s Q2 2024 U.S. Residential Property Mortgage Origination Report. This represents a 23.2% increase over the previous three-month period. Despite the surge, overall home credit activity was still down 6.1.2% from a peak reached in 2021 and down 1.6% from Q2 of 2023. However, it was the first increase in a year and brought the total number of home loans back to nearly where they were a year earlier. The recovery occurred in the midst of a robust springtime housing market and falling mortgage rates following several months of rising rates.
Key Findings:
- Improvements in all main residential loan categories—particularly for home purchase—led to an increase in total lending.
- Quarterly purchase-loan activity increased 32.7% to approximately 783,000
- Refi activity up 10.3% to about 546,000
- Home-equity credit lines increased 26.5% to approximately 286,000.
In terms of money, lenders made home mortgages worth close to $533 billion in Q2 of 2024. This was higher by 1.1% from Q2 of the previous year and by 27.6% from Q1 of 2024.
While the percentage of refinancing loans decreased, the share of residential mortgages for home acquisitions increased due to the differing growth among other loan kinds. Early in 2024, purchase loans continued to be the most prevalent type of mortgages in the U.S., accounting for about half of all mortgages. Purchase loans were followed by refinance packages and home equity lending.
“The mortgage industry got one of its biggest boosts in years during the second quarter, supported by a combination of the usual Springtime home-buyer demand coupled with more attractive mortgage rates,” said Rob Barber, CEO at ATTOM. “However, a cautionary note is warranted, as we shouldn’t read too much into one great quarter. A similar trend occurred last Spring, with lending dropping off significantly later in the year. But with interest rates settling down and projections for more cuts from the Federal Reserve over the coming months, it wouldn’t be surprising if business increased even more for lenders over the rest of 2024, or at least didn’t drop significantly.”
Total Lending Recovers, But Remains Well Below Peaks
In Q2 of 2024, banks and other lenders issued 1,615,281 residential mortgages overall, an increase from 1,311,377 in Q1 of the same year. The most recent number was still much behind the recent peak of 4,167,656 reached in Q1 of 2021 and was down somewhat from 1,642,100 in Q2 of 2023. However, three consecutive quarters of decreases were mostly reversed by the recent rise.
In Q2 of this year, a total of $532.7 billion in loans were made to homeowners and prospective buyers. Though still less than half of the recent peak of $1.3 trillion in 2021, that was an increase from $417.4 billion in the previous quarter and $526.8 billion in Q2 of 2023.
At the metro area level, the overall lending activity followed a similar pattern. In 201, or 98%, of the 205 metropolitan statistical regions in the U.S. with a population of 200,000 or more and at least 1,000 total residential mortgages granted between April and June of 2024, the total increased from the first to Q2 of this year. However, some 118—or 58% of the metro areas examined—saw a decline from Q2 of 2023.
Cities With the Largest Quarterly Increases in Lending Activity
The largest quarterly increases were in:
- Boulder, CO (total lending up 106.5% from Q1 of 2024 to Q2 of 2024)
- Honolulu (up 100.2%)
- Appleton, WI (up 63.1%)
- Sioux Falls, SD (up 56.8%)
- Champaign, IL (up 54.7%)
The largest gains in total loans from the first to the second quarter of 2024 (excluding Honolulu) were seen in the metro areas having a population of at least one million, namely San Jose, CA (up 46%), Minneapolis (up 44.3%), Indianapolis (up 42.3%), and Boston (up 35.4%).
The only four metro locations where lending decreased quarterly that had sufficient data to evaluate were Pensacola, FL (down 19.8%); Buffalo, NY (down 16.1%); Atlantic City, NJ (down 2.4%); and Springfield, IL (down 1.7%). Year-over-year, San Antonio, Austin, Texas, Dallas, Buffalo, NY, and St. Louis saw the biggest drops in total lending among metro areas with a population of at least one million, with total lending falling 19.1%, 14.9%, 13.9%, and 11.5% from Q2 of 2023 to Q2 of 2024.
Purchase Mortgages Jump Quarterly, Remaining Top Loan Type
While the $311 billion purchase loan volume was 39.2% higher than the $223.4 billion first-quarter level, the total amount of loans made during the second quarter of 2024 increased to 782,937 from 590,058 in Q1 of 2024. However, the figure was still 50% below the peak reached in the spring of 2021 and was down 7% from 841,984 a year earlier.
The amount in dollars was still 42% below the top of 2021 and down 2.2% from $318.1 billion in Q2 of the previous year. Of the 205 metro regions included in the survey, residential purchase-mortgage originations rose on a quarterly basis in 98% of them, but decreased on an annual basis in 74% of those markets.
The largest quarterly increases were in:
- Wichita, KS (purchase loans up 183.5% from Q1 of 2024 to Q2 of 2024)
- Boulder, CO (up 148.8%)
- Honolulu (up 143.5%)
- Indianapolis (up 86.8%)
- Fort Wayne, IN (up 82.8%)
The largest quarterly growth in metro areas with a population of at least one million in Q2 of 2024 occurred in San Jose, CA (up 68.5%); Boston (up 65.9%); and Minneapolis (up 60%), with the exception of Honolulu and Indianapolis.
The top annual decreases in purchase lending were in:
- San Antonio (down 32% from Q2 of 2023 to Q2 of 2024)
- Dallas (down 24%)
- Austin, Texas (down 22.1%)
- Houston (down 20.3%)
- St. Louis (down 19.6%)
For the first time in a year, the percentage of total lending that is made up of purchase mortgages increased. While still lower than 51.3% in Q2 of 2023, it rose to 48.5% in Q2 of 2024 from 45% in the previous quarter. Purchaser loans continued to be the most frequent type of loan, a significant increase from 29.7% in the beginning of 2021 when refi deals dominated the lending market.
Are Refi Mortgages On the Turnaround?
In Q2 of 2024, lenders issued 545,928 home refinance mortgages. This was an increase from 503,364 a year earlier and 494,862 in Q1 of 2024. After refinance lending fell by more than 80% in 2021 and 2022 due to a jump in interest rates, the most recent data reflected the latest in a string of minor recoveries.
Refinance volume in Q2 of 2024 was $168.1 billion, up 10.6% from the previous quarter’s $152 billion and 8.5% from Q2 of 2023’s $155 billion. Some 80% of the U.S. metro regions with sufficient data for analysis saw a quarterly increase in refinancing activity, and 76% saw an annual increase.
The largest quarterly increases were in:
- Honolulu: (refi loans up 69.7% from Q1 of 2024 to Q2 of 2024)
- Sioux Falls, SD (up 54.5%)
- Boulder, CO (up 54.5%)
- Champaign, IL (up 53.1%)
- Appleton, WI (up 50%)
Other than Honolulu, the metro areas with a population of at least one million that saw the largest quarterly increases in refinance activity were Providence, RI (up 29%), Minneapolis (up 24.9%), Detroit (up 24.7%), and Kansas City, MO (up 23.2%). In Q2 of 2024, 33.8% of all loan originations were refinance packages. That was significantly less than the 65.8% percentage in Q1 of 2021 and down from 37.7% in the previous quarter.
HELOC Lending Increases, Nearing Levels From a Year Earlier
Additionally, there was an increase in home-equity lines of credit (HELOCs), which went from 226,417 in Q1 of 2024 to 286,416 in the second. Losses from the previous year were almost all erased by the improvement, which is close to the amount of 296,752 in Q2 of 2023. HELOC loans increased to $53.6 billion in Q2 of 2024 from $42 billion in the previous three months, nearly matching the $53.7 billion lent in the same period the previous year.
In the most recent quarter, some 17.7% of all loans were HELOCs. Even while it was less than the 18.1% saw in Q2 of 2023, it was still about four times higher than the amount noted in 2020. The number of HELOC mortgage originations rose in 98% of the metro areas under analysis between the first and second quarters of 2024. The cities with a population of at least one million that experienced the biggest quarterly increases were Grand Rapids, MI (up 38.2%), Minneapolis (up 40.6%), Detroit (up 47.6%), Rochester, NY (up 49.6 percent), and Milwaukee (up 38.3%).
To read the full report, including more data, charts, and methodology, click here.
