Nearly 1.9 million (1,868,187) mortgage loans were originated on U.S. residential properties (1 to 4 units) in the second quarter – an increase of 26% compared with the first quarter but a decrease of 4% from the second quarter of 2015, according to ATTOM Data Solutions’ U.S. Residential Property Loan Origination Report.
Driving the 4% year-over-year decrease was a 12% decrease in refinances.
Conversely, purchase originations increased 1% from a year earlier – and it was the eighth consecutive quarter with an annual increase. Helping to drive that increase was a 5% year-over-year increase in home equity line of credit (HELOC) originations.
“Homeowners are increasingly tapping the home equity that many have built up during the last four years of rapidly rising home prices,” said Daren Blomquist, senior vice president at ATTOM Data Solutions, in a statement. “Meanwhile, those rapidly rising prices are also locking some non-cash buyers out of red-hot but high-priced markets, resulting in weaker purchase loan originations in places like Denver, San Francisco, Portland and Dallas. On the other hand, more affordable markets, such as Cleveland, Kansas City and Boise, are posting double-digit increases in purchase loan originations.”
Markets that saw the biggest increases in HELOC originations, year over year, in the second quarter were Dallas (up 36%); Birmingham, Ala. (up 30%); Phoenix (up 28%); Sacramento, Calif. (up 27%); and Seattle (up 25%).
Markets that saw the biggest increases in purchase originations, year over year, included Cleveland (up 31%); Kansas City (up 21%); Boise, Idaho (up 20%); Dayton, Ohio (up 17%); and Rochester, N.Y. (up 15%).
Markets that saw the biggest decreases in purchase originations, year over year, included Honolulu (down 16%); Denver (down 8%); Louisville, Ky. (down 7%); Houston (down 7%); and San Francisco (down 6%).
Veterans Affairs (VA) loan originations increased 35% from the previous quarter and increased 14% year over year to reach the highest level in 10 years. A total of 136,248 VA loans were originated – the highest level since the first quarter of 2006. VA loans accounted for 8.7% of all purchase and refi originations in the second quarter – the highest share also going back to the first quarter of 2006.
Mortgages backed by the Federal Housing Administration increased 29% from the previous quarter but decreased 17% from a year ago. There was a total of about 273,356 loans in the second quarter, accounting for about 17.5% of all purchase and refi loan originations – unchanged from the previous quarter but down from 19.9% in the second quarter of 2015.
A total of 11,377 residential construction loans were originated in the second quarter – an increase of 16% compared with the previous quarter and an increase of 1% from a year earlier.