New residential mortgages hit their highest level in 14 years

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Residential mortgages created in the fourth quarter of 2020 were at the highest level in nearly 14 years, according to a recent report by ATTOM data solutions.

The fourth quarter of the business Mortgage Creation Report for Residential Properties in USA 2020 shows that 3.51 million residential property mortgages were issued in the fourth quarter of 2020, up 5.5% from the previous quarter and 48% from the fourth quarter of 2019.

Lenders issued $ 1.06 trillion in mortgages in the fourth quarter of 2020 – up 6% from the previous quarter and 55% from a year ago – the highest quarterly amount since at least 2,000, according to the report. The quarterly rate of increase in lending and dollar volume represented the largest gains in any fourth quarter period since 2011.

The report found that the surge in mortgage activity in the last quarter came mainly from another jump in refinancing mortgages, but noted that the overall figure was also driven by strong home purchase loans and mortgages. lines of credit on home equity. In the fourth quarter of 2020, lenders refinanced 2.23 million mortgages, 12% more than the previous quarter and 71% more than the fourth quarter of 2019.

Homeowners who take advantage of low rates to roll over old mortgages into new ones continued to account for the majority of home loans (63%) in the fourth quarter of 2020, according to the report.

“Lenders continued to work overtime across the United States in the fourth quarter or into 2020, with increases in lending and dollar volumes rarely seen at a time of year when activity is normally slowing,” Todd Teta, chief product officer at ATTOM Data Solutions said in a press release. “The growing numbers have left another in a long line of markers showing how the housing market has mostly avoided the economic damage resulting from the virus pandemic. As with other housing market measures, the appetite for loans from homeowners and home seekers in the coming months remains uncertain, depending on interest rates and multiple factors linked to the pandemic. But fourth-quarter data shows continued strong demand for new mortgages, especially among homeowners looking to refinance. “

The report also revealed:

  • HELOC loans were down 3% from the previous quarter and 22.2% from the previous year, marking the lowest point since the first quarter of 2014. However, the dollar volume of HELOC loans in the fourth quarter increased 5.3% from the previous quarter to $ 54.76 billion, the largest quarterly increase since the second quarter of 2019.
  • Mortgages guaranteed by the Federal Housing Administration accounted for 10.3% of all residential real estate loans issued in the fourth quarter of 2020, down from 10.5% in the previous quarter and 13.1% in the fourth quarter from 2019.
  • Residential loans guaranteed by the US Department of Veterans Affairs accounted for 8.3% of all residential mortgage loans issued in the fourth quarter of 2020, up from 8.8% in the previous quarter and 9.3% a year ago.
  • Median down payments and amounts borrowed hit new highs again in the fourth quarter of 2020, with the median down payment for single-family homes and condos purchased with financing being $ 24,500, up 19.2% from 20,556 $ in the previous quarter and 82.3% from $ 13,441 in the fourth quarter of 2019, marking another new high going back to at least 2000.
  • The median loan amount for new homes purchased in the fourth quarter was $ 280,000, up 3.4% from the previous quarter and 24.7% from the fourth quarter of 2019, also marking a new high since 2000.

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