The growth in mortgages issued showed a second consecutive quarter gain, a pattern not observed for three years, according to the latest loan origination report from ATTOM Data.
The latest report shows that in the third quarter of 2024, 1.67 million mortgages were issued, a 1.9% increase both quarterly and year-over-year. Despite this increase in mortgages issued, the amount of mortgages was still down from a spring 2024 spike, and the 6% interest rate apparently left something to be desired, since total mortgages issued were off by nearly two-thirds the amount when they reached their highest point in 2021.
These trends can be attributed to improvements in refinance and home equity lending, instead of more buyers taking out loans, according to ATTOM, which also reported that lenders issued $550 billion in mortgage loans in Q3 2024, a 2.9% increase from Q2 and a 6.6% increase from Q3 2023.
There was a split among mortgage loan types, with purchase loans at nearly 50%, and refinance loans and home equity credit lines comprising the other nearly 50%.
“Mortgage lending rose again in the third quarter, but at a far slower pace than during the spring of this year when activity spiked nearly 25%,” said ATTOM CEO Rob Barber. “The latest increase, small as it was, likely came mainly from homeowners trading higher-rate loans they got in 2021 and 2022 for cheaper mortgages resulting from declining mortgage rates. But it looked like the third quarter rate dip wasn’t as helpful for purchase lending as buyers kept facing elevated prices and low supplies of properties for sale.”
The total number of mortgages issued by banks and other lenders was 1,666,816 in Q3 2024, an increase from 1,636,073 in Q2 and a year-over-year increase from 1,635,056 in Q3 2023. Total activity rose for the second consecutive quarter, which mirrored the pattern of mortgage growth—the pattern of consecutive quarterly growth hadn’t occurred for nearly three years, since early 2021.
Total lending still lagged behind its pandemic days, when in the first quarter of 2021, 4,165,695 mortgages were issued due to a 3% interest rate. According to the report, $553.1 billion was lent to homeowners and buyers in Q3 2024—an increase from $537.5 billion in Q2 2024 and from $518.6 billion in Q3 2023. This number was still less than half of the $1.3 trillion issued during 2021.
Overall, ATTOM’s loan origination report shows lending activity increased regionally as well, in the metros with enough data to analyze. Total lending activity increased in 125 out of 207 metros with a population of 200,000 or more and at least 1,000 total residential mortgages issued from July to September 2024, or 60.4%. Anchorage, Alaska, led the way in this regard, with a 78.6% increase in total lending from quarter-to-quarter. Yuma, Arizona, followed at 33.3%, and Ann Arbor, Michigan, was next at 33%.
Although overall lending activity increased in Q3, the number of mortgages issued to homebuyers was down both quarterly and annually. Compared to 2021, the number of purchase loans issued was halved. In terms of numbers, the Q3 total of 782,220 was down from 796,046 in Q2 and down from 814,610 in Q3 2023. That number was also down from 1.6 million in mid-2021.
The latest total dollar volumes of purchase loans was $306.6 billion, and was decreased by 2.5% from $314.3 billion in Q2, still an increase year-over-year from $304.1 billion total sales volume in Q3 2023 for a 0.8% increase. Total dollar volumes were still 43% beneath the 2021 peak.
Lenders issued 587,691 residential refinance mortgages in Q3. This was an increase from 549,812 in Q2 2024, and from 539,738 year-over-year.
The most recent figure in residential refinance mortgages was the most since Q3 2022. Refinance mortgages have been steadily increasing following a spike in interest rates from 2021 to 2022 that caused a decline in refinance mortgages of 80%.
The largest quarterly increases for metros were in Anchorage, Alaska (refinance loans increased by 59.1% from Q2 2024), Ann Arbor, Michigan (46.9% increase) and Vallejo, California (46.7% increase), ATTOM’s data showed.
To view the full report, click here.
