The total number of residential mortgages rose to 1.56 million in the second quarter. And while that’s down 38% from a year ago, that 21% quarterly increase is the first in two years. And it came at a time when mortgage rates were climbing.
ATTOM’s report credits a “resumption of the nation’s 11-year housing market boom,” which had gone on hiatus from the middle of 2022 through early 2023.
Overall lending in the second quarter did remain low compared to the highs reached in 2021—right before record-low mortgage rates doubled and soaring inflation triggered economic uncertainty across the U.S.
But even as mortgage rates climbed in the second quarter, purchase mortgages jumped by 29% to nearly 794,000, and refinance packages increased by 14% to 477,000. Home equity lines of credit (HELOCs) also rose by 13% to 285,000.
The value of residential mortgages issued in the second quarter totaled $494.3 billion—down by 41.5% from a year ago ($844.3 B) but up 23.5% from the previous quarter ($400.3 B).
Home buyers and owners alike lined back up again at the doors of mortgage lenders this Spring seeking loans of all kinds. It looks like owners took advantage of the small rate drop to refinance existing loans, while a jump in mortgages for purchasers was likely fueled by a number of forces that pushed the overall housing market to heat back up during the Spring buying season. Buyers also might have jumped back in amid worries about even more rate increases that could have priced them out of a new home.” Lenders certainly aren’t anywhere near as busy as they were back in 2021. And the second quarter surge could be just a momentary thing. But the upturn was significant, and a testimony to how strong the housing market remains around the country. - Rob Barber - CEO at ATTOM
MORTGAGE ACTIVITY INCREASED IN 97% OF THE 197 METROS ANALYZED
In 97% of the 197 metro areas analyzed, overall mortgage lending activity increased from the first quarter of 2023 to the second. In all 197 metros, mortgage lending dropped year over year.
The five metros with the largest quarterly increase in total residential mortgage lending:
- Knoxville, TN (total lending went up 109.4% from Q1 2023 to Q2 2023)
- Sioux Falls, SD (up 49%)
- Rochester, MN (up 48.6%)
- Des Moines, IA (up 45.4%)
- Manchester, NH (up 44.4%)
The only metros with populations of one million or more where total lending declined from Q1 2023 to Q2 were Buffalo, NY (down 39.2%) and St. Louis, MO (down 9.1%).
REFINANCE MORTGAGES ROSE 13.8% FROM THE LOW POINT OF THE CENTURY
Refinance mortgage originations rose 13.8% from the previous quarter’s low for the century (419,261). Lenders issued 477,219 refinance mortgages in Q2 2023, down 51.1% from 975,997 in Q2 2022 and down 83% from the peak of 2,743,700 set in early 2021.
Metros with the largest quarterly increases in refinance mortgages were led by—
- Knoxville, TN (refinance loans went up 87.4% from Q1 2023 to Q2)
- Sioux Falls, SD (up 47.2%)
- Duluth, MN (up 45.7%)
- Manchester, NH (up 45.2%)
- Beaumont, TX (up 41.7%)
The five metros with populations of one million or more that saw a decline in the number of refinance loans from Q1 2023 to Q2:
- Buffalo, NY (down 36.7%)
- Honolulu, HI (down 33.8%)
- St. Louis, MO (down 20.9%)
- Louisville, KY (down 15.2%)
- Grand Rapids, MI (down 1.4%
Refinance packages accounted for 30.7% of all mortgage loan originations in the second quarter of 2023, up from the previous quarter’s 32.6% but still 39.1% below its share for Q2 2023 and well under its 65.8% share in the first quarter of 2021.
