ATTOM attributed the drop to another double-digit drop in refinancing activity, both quarter-over-quarter and year-over-year.
“Mortgage rates that have nearly doubled over the past year have decimated the refinance market and are also starting to weigh on purchase lending,” said Rick Sharga, ATTOM’s Executive Vice President, Market Intelligence. , in a press release. “The combination of much higher mortgage rates and rising home prices has made the notion of buying a home simply unaffordable for many potential buyers, threatening to further depress mortgage lending volumes. release of the spring and summer months.”
For the first time since the start of 2019, refinancing activity in the second quarter did not account for the largest share of mortgage lending, falling to 39% of all lending. This figure was down from 53% in the first quarter and the recent peak of 66% at the start of 2021.
Buy-to-loan activity increased 8% quarterly, accounting for 46% of all borrowing. The best performing category in the second quarter was home equity loans. HELOCS have climbed 35% per quarter and 44% per year.
“Borrowers looking to tap into their equity should be aware that HELOC activity has been particularly strong among credit unions and community banks, as well as a small but growing number of custodian banks,” Sharga said. “Although non-bank mortgage lenders may begin to offer home equity loans more aggressively, they are unlikely to actively participate in the HELOC market.”
Banks and other lenders issued 2.39 million residential mortgages in the second quarter, down 13.2% from 2.7 million in the first quarter and down 40% year-on-year from 4 million . The annual decline was the largest since the first quarter of 2014.
Overall lending activity was down quarter over quarter in 80% of metropolitan areas with populations over 200,000 analyzed by ATTOM. The largest quarterly declines were recorded in Knoxville, Tennessee (down 59.9%), Roanoke, Virginia (down 52.7%), Charleston, SC (down 37%), St. Louis ( down 28.7%) and Philadelphia (down 27.3%). .
Besides St. Louis and Philadelphia, the metro areas with populations of at least 1 million that saw the largest declines in loans from the first to the second quarter were New York (down 25.9%), Detroit (down down 25.6%) and San Jose, CA (down 24.7%).
The largest increases in the number of mortgages from the first to the second quarter were recorded in Atlantic City, NJ (up 32.5%), Erie, Pennsylvania (up 18.8%), Peoria, Illinois (up 17 .4%), Topeka, Kan. (up 15.6%) and Utica, NY (up 14.6%).
The only metropolitan areas with a population of at least 1 million where lending increased were Honolulu (up 9.9%), Kansas City, Missouri (up 3.4%) and Rochester, NY (up 3.2%).
Lenders issued 941,111 residential refinance mortgages in the second quarter, the lowest number since the second quarter of 2019. That’s down 36% from the first quarter and down 60% year-over-year .
Refi activity declined from the first to the second quarter in 99% of the metropolitan areas analyzed by ATTOM. The largest quarterly declines were seen in Roanoke, Virginia (down 65.8%), Knoxville, Tennessee (down 64.4%), San Jose, California (down 58 .5%), Oxnard, California (down 56.3%) and Charleston, South Carolina. (down 55.3%).
Aside from San Jose, metro areas with populations of at least 1 million that saw the largest declines in refi activity were Portland, Oregon (down 53.2%), San Francisco (down 52.9%), Sacramento, Calif. (down 51.8%). and Chicago (down 49.8%).
The only metro areas where refi lending increased from Q1 to Q2 were Atlantic City, NJ (up 23.7%) and Utica, NY (up 8.5%).
Lenders issued 1.1 million purchase mortgages in the second quarter, up 7.6% from the first quarter but down 21.5% year-over-year. Residential mortgage purchase originations increased quarter-over-quarter in 80% of the metro areas analyzed, but declined year-over-year in 90%.
The largest quarterly increases were recorded in Madison, Wisconsin (up 60.8%), Honolulu (up 55.8%), Lafayette, Ind. (up 55.5%), Champaign, Illinois (up 52.6%) and Jackson, Mississippi (up 49.3%). percent). Besides Honolulu, the metropolitan areas with at least 1 million residents that saw the largest quarterly increases were Boston (up 41.7%), Seattle (up 33.6%), Richmond, VA. (up 31.9%) and Birmingham, Alabama (up 29.9%).
Residential mortgages fell the most in Knoxville, Tennessee (down 52%), Roanoke, Virginia (down 37.3%), Salinas, California (down 18.1%), Ogden, Utah (down 16 .9%) and Boise, Idaho (down 13.6%).
Metro areas with populations of at least 1 million where purchase origins declined the most between Q1 and Q2 were New York City (down 12%), Los Angeles (down 11%), St. -Louis (down 10.7%), Philadelphia (down 10.7%) and Detroit (down 9.5%).
HELOCs in Q2 grew 34.5% from Q1 and 43.8% year-on-year and accounted for 14.3% of all Q2 loans, more than double the 6% level in Q2. ‘last year.
HELOC mortgage issuance increased in 94% of the metropolitan areas analyzed. The largest increases in metropolitan areas with a population of at least 1 million occurred in Fresno, CA (up 82.9%), Riverside, CA (up 80.9% ), Buffalo (up 53.2%), San Diego (up 52%) and Los Angeles (up 51.5%). The only quarterly decline in HELOCs among metro areas with populations of at least 1 million was in St. Louis (down 11.7%).