The country saw 1.62 million residential mortgage originations in the second quarter of 2024, an increase of 23.2% from the previous quarter, and the first quarterly gain in a year.
The increase in overall lending in Q2 came amid the Spring homebuying season and lower mortgage interest rates that dipped downward after months of increases, according to Attom’s Q2 residential property mortgage origination report.
“The mortgage industry got one of its biggest boosts in years during the second quarter, supported by a combination of the usual Springtime homebuyer demand coupled with more attractive mortgage rates,” said Rob Barber, CEO at ATTOM.
In the second quarter, purchase loans were the most common type of mortgage in the U.S., accounting for 48.5% of all mortgages. Refis followed with 33.8%, and home-equity lending made up 17.7%.
Purchase loan activity jumped 32.7% from the previous quarter to about 783,000; refinance deals rose by 10.3% to about 546,000; and home equity line of credit (HELOC) increased 26.5% to about 283,000.
Mortgages backed by the Federal Housing Administration (FHA) decreased in the second quarter of 2024 as a percentage of all home loans after 10 straight quarterly increases. They accounted for 13.9% of all residential property loans originated in the second quarter of 2024.
Residential loans backed by the U.S. Department of Veterans Affairs (VA) totaled 5.1% of all residential property loans originated in the same period.
In the second quarter alone, lenders issued close to $533 billion worth of residential mortgages, up 27.6% from Q1 2024 and 1.1% from Q2 2023.
Lending activity from April to June jumped 23.2% from the previous three months, but still down 1.6% from 12 months ago and 61.2% from a high point hit in 2021 when the average 30-year fixed-rate mortgage fell to around 2.65%.
“We shouldn’t read too much into one great quarter. A similar trend occurred last Spring, with lending dropping off significantly later in the year. But with interest rates settling down and projections for more cuts from the Federal Reserve over the coming months, it wouldn’t be surprising if business increased even more for lenders over the rest of 2024, or at least didn’t drop significantly,” said Barber.
Fed chair Jerome Powell signaled that the central bank was poised to cut interest rates in September during the Kansas City Fed’s annual conference at Jackson Hole in Wyoming, one of the most closely watched speeches of the year.
Banks and other lenders issued a total of 1.62 million residential mortgages in Q2 2024, up from 1.31 million in Q1, but still down from 1.64 million in Q2 2023 and far below 4.12 million in Q1 2021. The recent gain mostly reversed three straight quarters of declines.
Among homes purchased with financing in the second quarter, the median loan amount rose 7.2% from the previous quarter to $368,207 as the national median home price hit a new high of about $420,000.
Median down payment increased by 11.1% quarter over quarter to $24,250.
