Mortgage Loans Spike During Q2 2019

TransUnion’s Q3 2019 Industry Insight Report says mortgage originations were buoyed by refinances, as originations during Q2 2019 grew 12% annually to 2.1 million. The Average new account balance grew during the quarter by 10% year-over-year. 

“It’s noteworthy that many of the more expensive MSAs experienced significant year-over-year origination growth in Q2. Of the top 20 MSAs, those with an average new account balance greater than $300K experienced origination growth of 20% year-over-year, while those MSAs with an average new account balance less than $300K experienced origination growth of only 13% year-over-year,” said Joe Mellman, SVP and Mortgage Business Leader at TransUnion. “Looking forward we expect refinance activity to drive origination growth, riding the availability of low-interest rates.”

The number of mortgage loans grew annually from 53.1 million to 56.1 million in Q2 2019. The average debt-per-borrower rose year-over-year from $205,782 last year to $210,457 during the quarter. 

Origination during the quarter, when compared to Q2 2018, rose to 2.1 million from 1.9 million. Originations have held steady at 1.9 million and 2 million for the past Q2s of 2017 and 2016, respectively. 

Supporting TransUnion’s research is the Mortgage Bankers Association, who reported weekly mortgage applications rose 9.6% from the week prior for the week ending on November 8. 

The refinance index rose 13% from the previous week and was 188% higher than the same week in 2018. Also seeing an increase was the purchase index, which rose 5% from the prior week and 15% year-over-year. 

"Mortgage applications increased to their highest level in over a month, as both purchase and refinance activity rose despite another climb in mortgage rates. Positive data on consumer sentiment, and growing optimism surrounding the U.S. and China trade dispute were behind last week's rise in the 30-year fixed mortgage rate to 4.03 percent," said Joel Kan, AVP of Economic and Industry Forecasting. "Refinance applications jumped 13 percent to the highest level in five weeks, as conventional, FHA, and VA refinances all posted weekly gains. With rates still in the 4 percent range, we continue to expect to see moderate growth in refinance activity in the final weeks of 2020."

Refinances accounted for 61.9% of all mortgage activity during the week, which is an increase from the prior week’s 59.5%.