Your inside source for real estate, development and construction information serving the counties of Mecklenburg, Union & Iredell VOLUME 106 NUMBER 34 ■ MECKTIMES.COM
Part of the
network
TUESDAY, SEPTEMBER 13, 2022 ■ $2.00
Four in five metro areas notched double-digit price gains in second quarter of 2022 Page 2
Construction employment in July trails prepandemic level Page 3
Mortgage rates jump up Page 4
ENNICO: Dealing with fear when starting a business Page 5
NOVAK: Anyone can fall prey to manipulation Page 6
Stocks drift lower, extending losses into 4th straight week Page 7
Steep drop in refinance activity drives continued slump in mortgage lending across U.S. in second quarter ATTOM has released its second-quarter 2022 U.S. Residential Property Mortgage Origination Report, which shows that 2.39 million mortgages secured by residential property (1 to 4 units) were originated in the second quarter of 2022 in the United States. That figure was down 13 percent from the first quarter of 2022 – the fifth quarterly decrease in a row – and down 40 percent from the second quarter of 2021 – the biggest annual drop since 2014. The decline resulted from another double-digit downturn in refinance activity that more than outweighed increases in home-purchase and homeequity lending. Overall, lenders issued $807.8 billion worth of mortgages in the second quarter of 2022. That was down quarterly by 11 percent and annually by 35 percent. As with the number of loans, the annual decrease in the dollar volume of loans marked the largest in eight years.
“Mortgage rates that have virtually doubled over the past year have decimated the refinance market and are starting to take a toll on purchase lending as well,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “The combination of much higher mortgage rates and rising home prices has made the notion of homebuying simply unaffordable for many prospective buyers, which threatens to drive loan volume down even further as we exit the spring and summer months.” The downturn in total activity resulted from just 941,000 residential loans getting rolled over into new mortgages during the second quarter of 2022 - a figure that was down 36 percent from the first quarter of 2022 and down 60 percent from a year earlier. Amid another rise in mortgage interest rates, refinance lending decreased for the fifth straight quarter, hitting a point that was just one-third of what
it was in early 2021. The dollar volume of refinance loans was down 35 percent from the prior quarter and 56 percent annually, to $310.1 billion. For the first time since early 2019, refinance activity in the second quarter did not represent the largest chunk of mortgages, dropping to 39 percent of all loans. That was off from 53 percent in the first quarter and from a recent peak of 66 percent in early 2021. Purchase-loan activity, meanwhile, increased modestly as the 2022 Spring homebuying season kicked into gear. Despite ongoing home-price spikes, the number of purchase loans rose 8 percent quarterly, to 1.1 million, representing 46 percent of all borrowing. Still, that gain was unusually small for the months running from April through June and left the number of purchase mortgages down 21 percent annually. The dollar volume of loans taken out to buy residential properties rose to $431.4 billion, up 15 percent from the
first quarter of this year, but still down 12 percent from the second quarter of last year. The best-performing category by far in the second quarter was again home-equity lending. Home Equity Lines of Credit shot up 35 percent quarterly and 44 percent annually, to 341,704. “Borrowers looking to tap into their equity should know that HELOC activity has been particularly strong among credit unions and community banks, along with a small but growing number of depository banks,” Sharga noted. “While non-bank mortgage lenders may begin to more aggressively originate home equity loans, it’s not likely they’ll be active participants in the HELOC market.” The latest loan trends reflected a housing market in flux, pushed by competing forces, and continued a sharp break from a period when lending activity nearly tripled
PLEASE SEE REFINANCE ON PAGE 6
“We’re witnessing a housing recession in terms of declining home sales and home building.” Lawrence Yun NAR
Story, page 4