For the first time since the onset of the COVID-19 pandemic, mortgages saw a quarterly decline, according to new data from ATTOM. Mortgages fell 3% in the second quarter of 2021, while still holding well above pre-pandemic levels as consumer behavior continued to shift in the market.
Refinance mortgages down 15%, contributed an outsized degree to the drop, as current homeowners shied away from interest rates that have leveled off after hitting historic lows. At the same time, new purchase loans actually rose in Q2 2021, jumping 22% and soaring in dollar value to $465.5 billion—77% above Q2 2020.
Refinancing still made up a majority of mortgage activity at 59%, though the single-quarter drop was the largest in the past four years, according to ATTOM.
Home equity lines of credit (HELOC) were also up for the first time since 2019, rising 15%. FHA loans also ticked up, although those mortgages have remained relatively flat throughout the pandemic.
“The demand for home loans across the country shifted significantly in the second quarter as refinancing activity receded and home-purchase and equity loans increased,” said Todd Teta, chief product officer at ATTOM, in a statement. “We haven’t seen that pattern for several years.” We will see whether this is a momentary blip or a real trend over the next few months, which looks to be a really key period for the lending industry.”
Cities with the largest decrease in refinance mortgages:
Refinance activity dropped in 82% of 218 qualifying metro areas since Q1, and saw a significant decrease of 10% or more in 58% of those areas. These cities had the largest drops:
– Des Moines, Iowa (down 66.2%)
– Sioux Falls, S.D. (down 65.4%)
– Ann Arbor, Mich. (down 64.3%)
– Appleton, Wisc. (down 52.5%)
– Myrtle Beach, S.C. (down 50.2%)
Cities with the largest increase in purchase mortgages:
Less than 10% of cities bucked the national trend by seeing a decrease in new purchase mortgages, with the largest being Myrtle Beach, South Carolina, (down 62.4%) and Appletone, Wisconsin, (down 61.9%). The vast majority of metro areas saw increases, however, with these areas seeing the biggest gains:
– Virginia Beach, Va. (up 103.9%)
– Peoria, Ill. (up 90.9%)
– Champaign, Ill. (up 75.4%)
– Erie, Pa. (up 71.5%)
– Fargo, N.D. (up 70.4%)
Virginia Beach also saw the largest increase in HELOC of metro areas with a population of at least 1 million, jumping 95.5%. The national median down payment amount and the ratio of down payment to home price also reached or tied high points in Q2 2021.
To access the full report, click here.
Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to jwilliams@rismedia.com.
