Lenders And Brokers Panic As Loan Origination Volume Plummets To Lowest Level Since The 9/11

A new report from ATTOM says Loan origination volume plummeted to its lowest level since 9/11/2001. It also says the record declines began in the first quarter of this year.

Approximately 1.28 million mortgages were issued nationwide in Q1 2024. ATTOMS’ 2024 U.S. Residential Property Mortgage Origination Report says originations are down 6.8% from Q3 2023. This also marks the 11th dip in the last 12 quarters. As a result, the number of mortgages issued is at it’s lowest level since the 9/11/2001. 

A total of $405.6 billion in residential mortgages was issued during Q1 2024. This is less than a third of the quarterly high of $1.29 trillion reached in 2021. This is also a decrease of 4.8% from Q4 2023 and 4.5% from this point last year.

Still, ATTOM CEO Rob Barber remains cautiously optimistic that a rebound is in store in Q2 of 2024:

“There is reason to hope that we will see something of a turnaround when second-quarter data comes in, given the jump in lending activity that happened during the peak home-buying season of 2023. But with little sign that interest rates are coming down, which could fire up refinance and HELOC lending, or that supplies of homes for sale are going up, any increase is likely to be limited.”

Every major category of residential lending suffered in the first quarter, with total lending activity falling 4.8% annually and 69.3% from the peak reached in 2021. 

Purchase loans still made up the largest share of total mortgages at more than 40%, but that share has decreased by more than four times the rate of refinance transactions over the first three months of the year, ATTOM reported. 

Purchase loan activity in Q1 represented about 565,000 of all loans, down 9.9% from the previous quarter, dropping for the third consecutive quarter. Refinances slipped 1.9% to roughly 491,000 loans in Q1, while home equity credit lines dropped 9% to 222,000 transactions.

While gaining share, refinances remained vastly below their peak of more than 2.7 million transactions in early 2021, when historically low, sub-3% mortgage rates led to a surge in this type of transaction. 

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