About 1,551,865 loans were originated on single-family homes and condos in the first quarter – a decrease of 6% compared with the fourth quarter of 2014 but up 17% compared to a year ago, according to RealtyTrac's recently released U.S. Residential Loan Origination Report.
Those loans totaled about $377 billion, down 1% from the second quarter but up 32% compared to the first quarter of 2014. Of that amount, about $256 billion – or 67.8% – was refinances while about $121 billion, or 32.2%, was purchase loans.
Of the nearly 1.6 million originations in the first quarter, 471,822 were purchase loans, down 25% from the previous quarter and up less than 1% from a year ago, while about 1,080,043 were refinances, an increase of 6% compared to the previous quarter and an increase of 27% from a year ago.
‘A dip in interest rates early in the year combined with lowered mortgage insurance premiums for Federal Housing Administration loans breathed some life back into the refinancing market in the first quarter,’ explains Daren Blomquist, vice president at RealtyTrac, in a statement. ‘Meanwhile the purchase loan market remained largely missing in action despite tepid growth from a year ago. The prime buying season still remains ahead, providing some hope that first-time homebuyers and other traditional buyers relying on traditional financing will come out in the woodwork in greater numbers in the coming months.’
Markets that saw the biggest year-over-year increases in loan originations (including refinances) include San Jose, Calif. (up 72%); San Diego, Calif. (up 64%); Oxnard-Thousand Oaks-Ventura, Calif. (up 64%); Palm Bay-Melbourne-Titusville, Fla. (up 61%); and Boston (up 54%).
Looking just at purchase volume, markets with biggest year-over-year increases in the first quarter include Palm Bay-Melbourne-Titusville, Fla. (up 72%); Dayton, Ohio (up 62%); Toledo, Ohio (up 36%); Tampa, Fla. (up 32%); and Kansas City (up 32%).
Conventional loan originations (backed by Fannie and Freddie) totaled 995,968 in the first quarter, representing 64.2% of all originations. That's a decrease of about 5% compared with the previous quarter – but up 13% from a year ago.
As the shift from a purchase market to a refinance market continued, due to historically low rates, conventional purchase loan originations decreased 27% from the previous quarter and were down 2% from a year ago, while conventional refinance originations increased 10% from the previous quarter and were up 21% from a year ago.
Origination volume of Veterans Affairs-backed loans was up a whopping 57% in the first quarter, year over year.
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