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‘Highly Unusual’ Quarterly Increase in Lending Activity

GSE loansThe number of mortgages secured by residential property of one to four units originated in the first quarter of 2021 indicates what experts are calling a quarter of "unusually strong home mortgage activity."

Mortgage originations are up 3% from the previous quarter and 71% from Q1 2020 at 3.77 million, according to the monthly U.S. Residential Property Mortgage Origination Report from the property data analysts at ATTOM Data Solutions. This marks the highest level in 14 years and the first time since 2009 that the total number of home mortgages rose from a fourth-quarter period to the first-quarter period since 2009.

With rates at about 3% for most home purchase and refinance loans, lenders issued some $1.16 trillion worth of mortgages in the first quarter of 2021, which is 5% more than the fourth quarter of 2020 and 81% compared to one year ago during the same period and the largest quarterly sum since at least 2000, ATTOM reported.

The increase, according to the analysts, can be attributed to the jump in refinancing that outpaced declines in home-purchase lending and home-equity lines of credit.

The 2.55 million home mortgages that lenders refinanced in the first quarter of 2021 represented a 12% increase over the fourth quarter of 2020 and a 113% spike over the first quarter of 2020. The dollar amount of refinance loans rose to $777.5 billion, a 14% increase from the previous quarter and a 114% jump from a year ago.

Refi lending has more than doubled since this time last year.

"Homeowners lined up to refinance their loans in ever-growing numbers during the first quarter of 2021, making for a highly unusual quarterly increase in total lending activity for that time of year. The home-mortgage industry almost always slows down in winter, but not this year because of so many homeowners hopping on super-low interest rates to reduce their monthly payments," said Todd Teta, Chief Product Officer at ATTOM Data Solutions. “Eventually, the refi side of the lending business will ease up after enough homeowners get in on the good deals. But there’s no sign of that happening in the very near future—yet another indicator of how the housing market remains strong amid uncertain economic times connected to the pandemic.”

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media/Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning news, among others. Contact Christina at christina.hughesbabb@thefivestar.com.
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