In an atypical opening quarter, total mortgage lending increased from the fourth quarter for the first time since 2009, according to Attom Data Solutions.
Driven by borrowers who refinanced at low interest rates ahead of the anticipated surge, lenders issued 3.77 million home loans, their highest quarterly level since 2007. That was $ 1.16 trillion, the largest amount in history at least 2000 – with Refis, who were $ 775.5 billion shares, buys $ 342.5 billion and $ 37.8 billion in home equity lines of credit.
Refis rose quarterly by 11.6% and annually by 113.2% to a total of 2.55 million loans and thus the highest value since the third quarter of 2003. The purchases fell briefly and made about 1.04 million loans. It was a quarterly decline of 7.2% and rose 41.7% year over year. HELOC loans continued to struggle after the pandemic, with only 187,029 such loans in the first quarter, a 27% decrease from Q4 2020 and 34.2% from Q1 2020. It is the fewest HELOCs since Q1 2013.
“During the first quarter of 2021, homeowners lined up to refinance their loans, resulting in an extremely unusual quarterly increase in total lending for that time of year,” said Todd Teta, chief product officer, Attom Data Solutions, Residential Property Mortgage Origination Report. “The mortgage industry almost always slows down during the winter, but not this year because so many homeowners are hopping on extremely low interest rates to cut their monthly payments.”
Among the housing markets of over 1 million residents, Buffalo, NY saw the largest increase in refi activity, up 55% from the previous quarter. This was followed by increases of 37.2% in Las Vegas and 31.8% in Milwaukee. Pittsburgh bucked the national refi trend, falling 23.1% quarterly, offsetting the 16.6% drops in Houston and 14.6% in St. Louis.
The largest quarterly increases in buying activity were in Orlando, Florida (29%), Miami (24.5%) and Baltimore (24%). Meanwhile, Buffalo purchase credits declined 65.1% from the fourth quarter, followed by 56.2% in Atlanta and 34.4% in St. Louis.
The average deposit increased to $ 18,700, down from $ 23,250 quarterly, but from $ 13,250 annually. The down payment percentage of the average home price followed the same pattern, increasing to 6.1% from 7.4% in the previous quarter and from 5% in the previous year. It’s the first time the down payment percentage has decreased in the past four quarters.
“Lenders have issued more residential mortgages than in any first quarter since 2006, and lenders were demanding fewer down payments on those loans,” Teta told National Mortgage News. “Both were signs that mortgage funds were available at the best interest rates ever.”