During the second quarter, 1.62 million mortgages secured by residential properties (1 to 4 units) were issued in the United States, marking a 23.2% increase compared to the previous three-month period according to ATTOM's second-quarter 2024 U.S. Residential Property Mortgage Origination Report, released today.
Despite the spike, total residential lending activity remains down 1.6% from the second quarter of 2023 and 61.2% from its peak in 2021. However, the second quarter's spike marked the first gains in a year, which ATTOM credited to spring's seasonal homebuying surge and mortgage interest rates that dipped downward after months of increases.
The increase in overall lending resulted from improvements across all major categories of residential loans, especially for purchases. Purchase-loan activity jumped 32.7% quarterly, to about 783,000 units. Refinance deals rose by 10.3%, to about 546,000 units, and home-equity lines of credit shot up 26.5%, to about 286,000 units.
Dollar-wise, lenders issued nearly $533 billion worth of residential mortgages in the second quarter, up 27.6% from the first quarter ($417.4 billion) and 1.1% from the second quarter of 2023 ($526.8 billion).
“The mortgage industry got one of its biggest boosts in years during the second quarter, supported by a combination of the usual Springtime home-buyer demand coupled with more attractive mortgage rates,” said Rob Barber, CEO at ATTOM. “However, a cautionary note is warranted, as we shouldn’t read too much into one great quarter. A similar trend occurred last Spring, with lending dropping off significantly later in the year."
Banks and other lenders issued a total of 1,615,281 residential mortgages in the second quarter, roughly 300,000 more units than the first quarter. The latest total still lags the second quarter of 2023 (1,642,100 units) and remains far behind the recent peak of 4,167,656 units originated in the first quarter of 2021. But, the recent gain mostly reversed three consecutive quarters of declines.
Overall lending activity followed a similar pattern at the metropolitan area level, rising from the first quarter to the second quarter in 201, or 98%, of the 205 metropolitan statistical areas around the U.S. that had a population of 200,000 or more and at least 1,000 total residential mortgages issued from April through June of 2024. Lending remained lower, however, from the second quarter of 2023 in 118, or 58%, of the metro areas analyzed.
The largest quarterly increases were in Boulder, Colo. (+106.5% quarterly); Honolulu, Hawaii (+100.2%); Appleton, Wis. (+63.1%); Sioux Falls, S.D. (+56.8%), and Champaign, Ill. (+54.7%).
The second quarter's purchase-loan total of 782,937 units was an increase from 590,058 units in the first quarter, while the $311 billion worth of purchase loans was 39.2% higher than the first quarter's $223.4 billion.
Residential purchase-mortgage originations increased quarterly in 98% of the 205 metro areas in the report while remaining down annually in 74% of those markets. The largest quarterly increases were in Wichita, Kan. (+183.5%); Boulder, Colo. (+148.8%), and Honolulu (+143.5%).
The largest annual decreases in purchase lending in metro areas with a population of at least 1 million all occurred in Texas: San Antonio (-32%), Dallas (-24%), and Austin (-22.1%).
Meanwhile, lenders issued 545,928 residential refinance mortgages in the second quarter, an increase from 494,862 units in the first quarter and 503,364 units a year earlier. The $168.1 billion worth of refinance packages in the second quarter was up 10.6% from $152 billion in the prior quarter and 8.5% from $155 billion in the second quarter of 2023.
"With interest rates settling down and projections for more cuts from the Federal Reserve over the coming months, it wouldn’t be surprising if business increased even more for lenders over the rest of 2024, or at least didn’t drop significantly,” Barber added.
