RealtyTrac's latest U.S. Residential Property Loan Origination Report shows 1.4 million loans were originated on U.S. residential properties in the first quarter, the lowest level since the first quarter of 2014.
The Q1 loan origination report is derived from publicly recorded mortgages and deeds of trust collected by RealtyTrac in more than 950 counties accounting for more than 80% of the U.S. population. The 1.4 million loans is down 12% from the previous quarter and down 8% from a year ago.The year-over-year decrease in total originations was driven by a 20% year-over-year decrease in refinance originations even while purchase originations increased 3% from a year ago and Home Equity Line of Credit (HELOC) originations increased 10% from a year ago."After a surprisingly strong 2015, the mortgage refi market started running out of steam in the first quarter of 2016 despite lower mortgage interest rates," said Daren Blomquist, senior vice president at RealtyTrac. "Meanwhile the purchase loan market continued the pattern of slow-and-steady growth that it has been following the past two years, and HELOC originations increased on a year-over-year basis for the 16th consecutive quarter, showing that borrowers are regaining both home value and the confidence needed to increasingly leverage their home equity."Among 50 metropolitan statistical areas with at least 5,000 total loan originations in the first quarter, those with the biggest year-over-year percentage increase in HELOC originations were Dallas (up 35%); Louisville, Ky. (up 28%); Seattle (up 25%); Sacramento, Calif. (up 25%); and Columbus, Ohio (up 23%).Other metro areas with a 20% or more increase in HELOC originations from a year ago were San Antonio (up 23%); Orlando, Fla. (up 23%); Portland, Ore. (up 22%); Cincinnati, (up 21%); and Tampa, Fla. (up 20%)."Loosening credit, low interest rates and the first time millennial buyers moving into the South Florida real estate market all add up to an 8% increase in purchase loan originations for the first quarter this year over last year’s first quarter,” said Mike Pappas, CEO and president at The Keyes Company, covering South Florida. "Our rising prices and increasing equity are giving confidence to homeowners as we have seen HELOCs increase 12% year-over-year."