Today's Housing Market: More Mortgages, Higher Prices, Fewer Delinquencies

Three new data reports have concluded that more people are taking out mortgages and are willing to pay more for their properties, while fewer people who already own homes are having problems paying back their home loans.

Uptick in Lending: ATTOM’s 2023 U.S. Residential Property Mortgage Origination Report found that 1.55 million mortgages were secured by residential property during the second quarter of this year. And while that number was down by 38% from one year earlier, it was also up 21% from the first quarter – this marked the first increase in two years.

Lenders issued $494 billion worth of residential mortgages in the second quarter, down by 41% from the previous year but up by 23% from the previous quarter. ATTOM attributed the quarterly spike to the reanimation of the marketing boom following the stagnation that occurred from the middle of 2022 to the early part of this year.

“Home buyers and owners alike lined back up again at the doors of mortgage lenders this Spring seeking loans of all kinds. It looks like owners took advantage of the small rate drop to refinance existing loans, while a jump in mortgages for purchasers was likely fueled by a number of forces that pushed the overall housing market to heat back up during the Spring buying season,” said Rob Barber, CEO at ATTOM. “Buyers also might have jumped back in amid worries about even more rate increases that could have priced them out of a new home. Lenders certainly aren’t anywhere near as busy as they were back in 2021. And the second quarter surge could be just a momentary thing. But the upturn was significant, and a testimony to how strong the housing market remains around the country.”

Home Price Bump: Realtor.com’s August Monthly Housing Trends Report recorded a 0.7% increase in home prices in August, a turnaround from two earlier months of year-over-year declines. Realtor.com attributed this to a tight active inventory which is 7.9% below the level from August 2022 and 47.8% below the typical pre-pandemic levels. The U.S. median list price for August was $435,000.

“Inventory remains persistently low, even with record-high mortgage rates putting a damper on demand,” said Danielle Hale, Chief Economist for Realtor.com. “The inventory crunch continues to put upward pressure on home prices, amplifying affordability concerns and shutting some potential buyers out of the market. However, we anticipate mortgage rates will gradually ease through the end of the year and, despite this month’s bump in home prices, we’ll be unlikely to see a new price peak this year.”

Paying on Time: CoreLogic’s Loan Performance Insights Report for June found 2.6% of all mortgages in some stage of delinquency, down 0.3% from June. No state posted year-over-year increases in overall mortgage delinquency rates in June, and annual delinquency rate decreases ranged from -0.9 and 0.0 percentage points.

“The national mortgage delinquency rate remained at a historic low in June,” said Molly Boesel, principal economist for CoreLogic. “In addition, fewer states and metro areas posted annual increases in overall delinquency rates compared with May. While June’s data does not reflect the most recent U.S. natural catastrophes, it is typical to see mortgage delinquencies increase about one month following disasters. Delinquency rates in these areas often remain elevated for months, progressing from early stage to serious. For example, two Florida Gulf Coast communities continued to post annual increases in serious delinquency rates in June, nine months after the property damage from Hurricane Ian in September 2022.”