Q1 Mortgage Lending At Lowest Level Since 2000

The first quarter of 2024 saw the lowest level of home mortgage lending since 2000, according to new data from ATTOM.

A total of 1.28 million mortgages secured by residential property were issued in the first three months of the year, down 6.8% from the previous quarter. This marked the 11th decline in the last 12 quarters. On a year-over-year basis, residential lending activity down 4.8% – the first quarter’s activity was also down by 69.3% from its high point hit in the pandemic-rocked 2021.

Lenders issued $405.6 billion worth of residential mortgages in the first quarter, down 4.8% from the previous quarter and down 4.5% from one year earlier. ATTOM also noted that purchase loan activity fell by 9.9% during the quarter to about 565,000, while refinance deals were down by 1.9% to 491,000. Home equity credit lines slipped 9% to 222,000.

The few bright spots in the first quarter involved federal mortgages programs. Mortgages backed by the Federal Housing Administration accounted for 210,246, or 16.5%, of all residential property loans originated in the first quarter, up by 15.7% from the previous quarter and up 12.9% from one year earlier. Residential loans backed by the U.S. Department of Veterans Affairs (VA) totaled 68,430, or 5.4%, of all residential property loans originated in the first quarter, up from 4.3% in the previous quarter and only a scant dip from the first quarter of 2023 level of 5.5%.

ATTOM attributed the dismal first quarter numbers to elevated mortgage rates that pushed homeownership costs higher, coupled with lingering inventory shortages that resulted in more prospective buyers being shut out of the housing market.

“There is reason to hope that we will see something of a turnaround when second quarter data comes in, given the jump in lending activity that happened during the peak home buying season of 2023,” said Rob Barber, CEO at ATTOM. “But with little sign that interest rates are coming down, which could fire up refinance and HELOC lending, or that supplies of homes for sale are going up, any increase is likely to be limited.”