Equifax: Mortgage Originations Up 74% Compared To Last Year

Posted by Patrick Barnard on July 01, 2015 No Comments
Categories : Residential Mortgage

So far, 2015 has been a good year for mortgage originations, according to a recent report from Equifax.

The credit bureau's National Consumer Credit Trends Report shows that total mortgage originations reached $466 billion in the first quarter, an increase of 74.4% compared to the first quarter of 2014.

First mortgages fueled the growth, jumping 79.9% compared to the first quarter of 2014 to reach $430 billion. Meanwhile, originations of home equity lines of credit (HELOCs) rose 30% to $30.9 billion and new home equity installment loans climbed 13.6% to $5.0 billion.

As of March, the average first-lien mortgage loan amount was $232,547, an increase of 11.5% compared to March 2014, according to the report.

About 1.78 million first mortgages were originated during the first quarter – up an impressive 54.9% compared to the first quarter of 2014 and 13.6% higher than in the fourth quarter of 2014.

About 4.5% of those loans went to borrowers with Equifax Risk Scores of below 620 (generally considered sub-prime), the report shows.

About 3.1% of loans went to borrowers with sub-prime credit scores, down from 3.5% in the first quarter of 2014 and down from about 10% in the first quarter of 2008.

The average loan amount for a first mortgage originated to a borrower with a sub-prime credit score in March was $152,260, an increase of 9.9% compared to March 2014.

Still, mortgage credit remains exceptionally tight.

‘The drop in mortgage rates that began in the fourth quarter of last year kicked off a refinance boomlet that accelerated in the first quarter, as rates fell further, averaging just 3.7 percent for the first three months of this year,’ says Amy Crews Cutts, chief economist at Equifax. ‘While rates have recently reversed that trend and are back up to about four percent, they remain extremely low historically. These rates, coupled with a housing market that is showing signs of vigor, should carry the mortgage business over the summer.’

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