More than 7.3 million loans were originated on U.S. residential properties (one to four units) in 2016 – up 2% compared with 2015 to reach the highest total since 2013, according to ATTOM Data Solutions’ recently released U.S. Residential Property Loan Origination Report.
Looking just at the fourth quarter, more than 1.7 million loans were originated – down 15% compared with the third quarter but up 2% compared with the fourth quarter of 2015, the company says.
More than $461 billion in loans was originated in the fourth quarter – an increase of 8% compared with a year earlier.
Most of the originations in the fourth quarter were refinances, which, according to Daren Blomquist, senior vice president at ATTOM Data Solutions, was “surprising, given the rising interest rates.” However, “many homeowners may have been trying to lock in still relatively low interest rates before those interest rates rose further,” he explains.
“On the other hand, rising interest rates did seem to have a chilling effect on home buyers using financing, as evidenced not only by the drop in purchase loan originations, but also a corresponding rise in the share of cash buyers, drop in Federal Housing Administration [FHA] buyer share, and a rise in the average down payment percentage in the fourth quarter compared to the previous quarter,” Blomquist adds. “For the year, the median down payment for loans secured by single-family homes and condos was 6.0 percent of the median sales price nationwide – the lowest down payment percentage since 2012 but still close to twice the 3.3 percent in 2006 during the last housing boom.”
About 3.3 million refinance loans were originated in 2016 – up 4% compared with 2015, according to the report.
Meanwhile, almost 2.8 million purchase loans were originated – down 1% compared with 2015.
About 595,500 of those purchase loans came in the fourth quarter. That’s down 26% compared with the third quarter and down 12% compared with the fourth quarter of 2015.
It was the second consecutive quarter to see a year-over-year decrease in the number of purchase loans, following eight consecutive quarters of year-over-year increases.
The total dollar volume of purchase originations in the fourth quarter was more than $161 billion, down 25% compared with the previous quarter and down 8% compared with a year earlier.
The report shows that non-bank mortgage lenders continued to gain market share from the big banks: The top two purchase loan originators in the fourth quarter were Quicken Loans (14,678) and Caliber Home Loans (12,075), followed by Wells Fargo (10,826), Fairway (9,149) and JP Morgan Chase (7,994).
Caliber Home Loans saw its fourth-quarter originations increase 21%, while Fairway saw an increase of 19% and Quicken Loans 4%.
Meanwhile, the two traditional big banks in the top five both posted year-over-year decreases in purchase loan activity in the fourth quarter: JP Morgan Chase down 15% and Wells Fargo down 5%.
A total of 883,836 refinance loans were originated in the fourth quarter – down 6% from the previous quarter but still up 20% from a year earlier.
The total dollar volume of refinance originations in the fourth quarter was more than $246 billion, down 5% from the previous quarter but still up 27% from a year ago.
Interestingly, the report shows that the share of loans backed by the FHA dropped to a two-year low in the fourth quarter.
A total of 226,142 FHA loans were originated in the fourth quarter – down 21% from the previous quarter and down 9% from a year earlier. FHA loans accounted for 15.3% of all loans originated during the quarter – down from 16.4% in the previous quarter and down from 17.6% a year earlier.
For the full report, click here.