Quarterly loan originations fall to lowest point in more than two decades

Refinances, in particular, plummet to lowest number of originations this century

Only 1.25 million residential mortgages were originated in the first quarter of this year — the lowest number since late 2000, Attom Data Solutions reported.

First-quarter 2023 origination count was down 19% from fourth-quarter 2022, the eighth straight quarter of declining loan origination counts. The number was down 56% on a year-over-year basis and was 70% below the recent peak of originations reached in Q1 2021.

By dollar volume, originations totaled only $388 billion in the first quarter, a plunge of 20% from the prior quarter and 58% below year-ago levels.

“Lenders saw opportunities dwindle even more during the first quarter as the longest slowdown in mortgage activity in at least 20 years continued,” said Rob Barber, CEO of Attom Data. “In one sense, it wasn’t that unusual, given that wintertime is usually the slow time of the year for lenders. But the latest slide extends a run that started two years ago and has carved away nearly three-quarters of the home mortgage business.

“Things remain uncertain in the near future, with the potential for interest rates and inflation to go either way, but the spring buying season will be a key indicator of whether things may turn around.”

Originations were down in the first quarter across all loan types. The purchase side saw only 595,253 mortgage originations — the lowest since early 2014 — down 19% from one quarter prior and down 44% from one year ago. The dollar volume of purchase transactions was $216 billion in the first quarter, an 18% drop from the preceding quarter and 45% below that of Q1 2022.

The refinance side fell to an even more dubious trough, with only 407,956 mortgages originated. That’s the lowest count of this century, down 18% quarter over quarter, 73% year over year and 85% from first-quarter 2021. On a dollar value basis, $127 billion in refinance loans were originated from January through March, down 21% quarterly and 74% yearly.

Home equity lending was down as well, marking a second straight quarter of downward trajectory. A total of 245,071 home equity loans were originated in the opening quarter of 2023, down 23% from the previous three-month period.


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