Mortgage originations continue shift to fixed-rate products from ARMsMortgagePress.comMBA, interest-only loans, first-time homebuyer, FHA, reverse mortgages
Fixed-rate mortgages dominated mortgage originations in the
first half of 2007, according to the recently-released Mortgage Bankers
Association's Mortgage Originations Survey. The fixed-rate
share showed a big jump from the second half of 2006.
Key findings from the survey include (unless otherwise noted,
percentages are based on dollar volume of originated loans):
•For first mortgages, fixed-rate loans, including
interest-only (IO) loans, accounted for 53.4 percent of loans (67.4
percent based on number of loans) in the first half of 2007,
compared to 46.2 percent (60.5 percent based on number of loans) in
the second half of 2006.
•IOs accounted for 31.1 percent of originations in the first
half of 2007, compared to 28.5 percent in the second half of 2006.
However, fixed-rate IOs accounted for 32.5 percent of all IOs in
the first half of 2007, compared to 21.2 percent in the second half
•First-time homebuyer purchases represented 26.9 percent of
home purchases in the first half of 2007, unchanged from the second
half of 2006. The average loan amount was $202,265, which was less
than the average loan amount of $233,433 for non-first-time
•Of the current period originations, 37.1 percent were for
single-family attached homes, 58.5 percent for single-family
detached homes, 0.7 percent for manufactured and mobile homes, and
3.8 percent for two- to four-unit structures. Approximately 54.3
percent of single-family attached home originations were for condos
or cooperatives, with the remainder as other single-family attached
properties such as townhouses, duplexes and row houses.
•From the second half of 2006 to the first half of 2007,
reverse mortgage dollar volume decreased 92.4 percent. The Federal
Housing Administration's Home Equity Conversion Mortgages (HECMs)
decreased by 92.4 percent and other reverse mortgages increased 13
percent, while the number of reverse mortgage loans decreased 93.1
percent. This result was driven by a 92.4 percent decrease in
smaller balance HECM loans which comprised 86.9 percent of the
dollar volume of reverse mortgages; therefore, the 13 percent
increase in (typically) large dollar balance reverse mortgages did
not have a discernible effect on the overall trend of reverse
mortgage dollar volume.
•The percentage of second mortgage originations that were
closed-end decreased to 27.2 percent of dollars and 35.8 percent of
loans in the first half of 2007 from 34.2 percent of dollars and
43.3 percent of loans in the second half of 2006.
For more information, visit www.mortgagebankers.org.