Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 107 NUMBER 12 ■ MECKTIMES.COM
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TUESDAY, MARCH 21, 2023
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Mortgage lending slumps again across U.S. ATTOM has released its fourth-quarter 2022 U.S. Residential Property Mortgage Origination Report, which shows that 1.52 million mortgages secured by residential property (1 to 4 units) were originated in the fourth quarter of 2022 in the United States. That figure was down 24 percent from the third quarter of 2022, marking the seventh quarterly decrease in a row, and down 55 percent from Q4 2021. The ongoing decline in residential lending resulted from some of the largest downturns in both refinance and purchase loan activity this century along with the first drop in home-equity lending in a year. The contraction continued as the 11-year U.S. housing market boom stalled in the second half of last year amid rising mortgage rates, consumer price inflation and other signs of economic uncertainty. During a period when average mortgage interest rates doubled to near 7 percent for 30-year fixed loans, lenders issued just $476 billion worth of mortgages in the fourth quarter of 2022. That was down quarterly by 27 percent and annually by 57 percent. Within the overall activity, there were 708,739 loans granted to home purchasers in the fourth quarter of 2022, down 26 percent from the third quarter of 2022 and down 45 percent from the fourth quarter of 2021. The dollar volume of purchase mortgages dropped 28 percent quarterly and 44 percent annually, to $257 billion. On the refinance side, only 496,221 mortgages were rolled over into new ones. That was down 27 percent quarterly, and down 73 percent annually. The dollar volume of refinance loans was down 27 percent from the prior quarter and 73 percent annually, to $158 billion.
Even home-equity lending dropped, by 16 percent in the last few months of 2022, to a total of 313,973. The decline followed growth in five of the previous six quarters. “The lending industry experienced a triple-dose of hits in the fourth quarter of last year as mortgage rates kept rising to levels not seen in more than 15 years and the U.S. housing market continued to stall after a decade of prosperity,” said Rob Barber, chief executive officer at ATTOM. “Rates have settled back down a bit so far this year, going back and forth in small amounts. That could lure some potential home buyers back into the market, especially if prices keep dropping. It also could spur some renewed refinance and HELOC action.” In another sign of how much lending patterns have changed over the past two years, refinance activity represented just one-third of overall mortgages at the end of 2022, compared to two-thirds as recently as the first quarter of 2021. Purchase loans, meanwhile, comprised almost half of all loans, versus about 30 percent early in 2021. Home-equity lines of credit, despite a decline, still made up one of every five mortgages in the fourth quarter of 2022, up from one of every 22 in the first few months of 2021.
Total lending activity continues to plummet
Banks and other lenders issued a total of 1,518,933 residential mortgages in the fourth quarter of 2022 - the lowest number since the first quarter of 2014. The latest figure was down 24.5 percent from 2,010,609 in the third quarter of 2022 and down 55.2 percent from 3,390,801 in the fourth quarter of 2021. The total number fell for the seventh straight quarter, extending the longest run
of declines this century, while the annual decline marked the largest since at least 2001. The $475.5 billion dollar volume of loans in the fourth quarter was down 26.8 percent from $649.2 billion in the prior quarter and was 56.7 percent less than the $1.1 trillion lent in the fourth quarter of 2021. Overall lending activity decreased from the third quarter of 2022 to the fourth quarter of 2022 in all 191 of the metropolitan statistical areas around the U.S. with a population of 200,000 or more and at least 1,000 total residential mortgages issued in the fourth quarter of 2022. It was down annually in all but one of those metro areas. Total lending activity dropped at least 25 percent quarterly in 83 of the metros with enough data to analyze (43 percent). The largest quarterly decreases were in Honolulu, HI (total lending down 47.7 percent from the third to the fourth quarter of 2022); Knoxville, TN (down 47.6 percent); Buffalo, NY (down 42.2 percent); Charleston, SC (down 40.1 percent) and Beaumont, TX (down 36.3 percent). Aside from Buffalo and Honolulu, metro areas with a population of least 1 million that had the biggest decreases in total loans from the third quarter to the fourth quarter of 2022 were San Jose, CA (down 32.7 percent); St. Louis, MO (down 32.6 percent) and Seattle, WA (down 32.5 percent). The smallest decreases from the third quarter to the fourth quarter of 2022 in metro areas with a population of at least 1 million were in Tampa, FL (down 15.4 percent); Dallas, TX (down 15.5 percent); Orlando, FL (down 16.2 percent); Miami, FL (down 17.3 percent) and Baltimore, MD
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