Friday, June 21, 2024

Mortgage lending activity in Q1 2024 drops to nearly historic lows

Mortgage Lending in the U.S. Sees Significant Decline in First Quarter of 2024

The state of mortgage lending in the U.S. is experiencing a significant decline, with the first quarter of 2024 showing a 6.7% drop in the number of mortgages secured by residential property. This marks the 11th drop in the past 12 quarters and brings lending activity to its lowest level since the year 2000. The latest U.S. Residential Property Mortgage Origination Report from data provider Attom highlights the challenges facing the housing market, including tight inventory levels, high mortgage interest rates, and affordability issues for many households.

All major mortgage lending categories have seen losses, with purchase-loan activity down by 9.9%, refinance deals decreasing by 1.9%, and home-equity credit lines slipping by 9%. Despite these challenges, there is hope for a turnaround in the second quarter of 2024, as the peak home-buying season may boost lending activity. However, with interest rates remaining high and limited housing supply, any increase in lending is likely to be modest.

Average interest rates for 30-year fixed loans are hovering around 7%, which has kept homeownership costs elevated and limited mortgage lending. In the first quarter of 2024, lenders issued $405.6 billion worth of residential mortgages, down from the previous quarter and year. Refinances saw a slight increase compared to the previous year, while government-backed lending from the FHA and VA rose as a percentage of all lending activity.

Overall, the challenges facing the mortgage lending market in the U.S. are significant, but there is potential for improvement in the coming months. As the housing market continues to evolve, lenders and borrowers alike will need to adapt to changing conditions to navigate the current landscape effectively. Stay tuned for updates on the state of mortgage lending in the U.S. as we move through 2024.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. The content is based on general research and may not be accurate, reliable, or up-to-date. Before making any financial decisions, it is recommended to consult with a professional financial advisor or conduct thorough research to verify the accuracy of the information presented. The author and publisher disclaim any liability for any financial losses or damages incurred as a result of relying on the information provided in this article. Readers are encouraged to independently verify the facts and information before making any financial decisions.

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