U.S. Residential Loan Originations Down 19 Percent in Q4 2017 Led by 34 Percent Drop in Refinance Originations
Santa Rosa, California Posts Biggest Drop Among U.S. Metro Areas;
Median Down Payment on Home Purchases Increases 20 Percent From a Year Ago;
Construction Loan Originations Up 33 Percent to Two-Year High, Up 345 Percent in Houston
IRVINE, Calif. – March 15, 2018 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its Q4 2017 U.S. Residential Property Loan Origination Report, which shows that more than 1.9 million (1,903,364) loans secured by residential property (1 to 4 units) were originated in Q4 2017, down 20 percent from the previous quarter and down 19 percent from a year ago.
- 818,158 of the residential loans originated in Q4 2017 were refinance loans, down 17 percent from the previous quarter and down 34 percent from a year ago.
- 791,637 of the residential loans originated in Q4 2017 were purchase loans, down 22 percent from the previous quarter and down 1 percent from a year ago.
- 293,570 Home Equity Lines of Credit (HELOCs) were originated on residential properties in Q4 2017, down 25 percent from a nine-year high in the previous quarter and down 7 percent from a year ago.
The loan origination report is derived from publicly recorded mortgages and deeds of trust collected by ATTOM Data Solutions in more than 1,700 counties accounting for more than 87 percent of the U.S. population. Counts and dollar volumes for the two most recent quarters are projected based on available data at the time of the report (see full methodology below).
“The falloff in refinance originations continued for the third straight quarter, but purchase originations held steady compared to a year ago despite ballooning down payment amounts that make it more difficult for first-time homebuyers to compete — as evidenced by the three-year low in the share of FHA buyers,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “And while the rise in construction loans in part reflects homeowners reconstructing in the wake of hurricane Harvey in southeast Texas, the widespread rise in construction loans in other parts of the country indicates that more homeowners are staying put and remodeling rather than trying to move up into another home that comes with a big down payment and probably a higher mortgage interest rate.”
Median down payment increases 20 percent from year ago
The median down payment on single family homes and condos purchased with financing in Q4 2017 was $18,000, down from a record high $19,100 in the previous quarter but up 20 percent from $14,950 in Q4 2016.
The median down payment of $18,000 was 7.1 percent of the median sales price of the homes purchased with financing during the quarter, down from a four-year high OF 7.3 percent in the previous quarter but still up from 6.2 percent in Q4 2016.
“The median down payment in the greater Seattle area of 14.1 percent is twice the national average and continuing to rise,” said Matthew Gardner, chief economist at Windermere Real Estate covering Seattle. “This is good news for homeowners in our market as it provides them with a layer of protection should home prices see a downturn in the future.”
Among 143 metropolitan statistical areas analyzed for down payments, those with the biggest median down payments were San Jose, California ($268,000); San Francisco, California ($174,500); Santa Rosa, California ($123,450); Los Angeles, California ($119,800); and Ventura, California ($107,000).
FHA loan share down to three-year low
Residential loans backed by the Federal Housing Administration (FHA) accounted for 12.0 percent of all residential property loans originated in Q4 2017, down from 12.9 percent in the previous quarter and down from 12.3 percent a year ago to the lowest share since Q4 2014 — a three-year low.
Residential loans backed by the U.S. Department of Veterans Affairs (VA) accounted for 6.6 percent of all residential property loans originated in Q4 2017, unchanged from the previous quarter but down from 7.6 percent in Q4 2016.
Construction loans increase to more than two-year high with Houston at all-time high
A total of 29,357 construction loans backed by residential real estate (1 to 4 units) were originated in Q4 2017, up 12 percent from the previous quarter and up 33 percent from a year ago to the highest level since Q3 2015 — a more than two-year high. Construction loans are those that finance improvements to real estate.
Houston documented the most residential construction loan originations among 42 metropolitan statistical areas analyzed for construction loan data in the report, with 4,241 originated in Q4 2017 — up 345 percent from a year ago to an all-time high as far back as data was available for the report, Q1 2006. Residential construction loan originations also spiked in the Texas metros of Beaumont-Port Arthur (up 2,135 percent); El Paso (up 787 percent); and Corpus Christi (up 126 percent).
Other metro areas with increases in residential construction loan originations included Kansas City (up 104 percent); San Francisco, California (up 80 percent); San Diego, California (up 57 percent); Jacksonville, Florida (up 53 percent); and Orlando, Florida (up 41 percent).
Santa Rosa, California, posts biggest drop in loan originations among metro areas
Among the 120 metropolitan statistical areas analyzed in the report, those with the biggest year-over-year decrease in loan origination volume in Q4 2017 were Santa Rosa, California (down 47 percent); San Jose, California (down 39 percent); San Luis Obispo, California (down 38 percent); Denver, Colorado (down 37 percent); and Boulder, Colorado (down 37 percent).
Only eight of the 120 metropolitan statistical areas analyzed in the report posted a year-over-year increase in total loan originations in Q4 2017: Lexington, Kentucky (up 40 percent); Raleigh, North Carolina (up 37 percent); Huntington, West Virginia (up 27 percent); Asheville, North Carolina (up 13 percent); Davenport, Iowa (up 7 percent); Memphis, Tennessee (up 4 percent); Dayton, Ohio (up 3 percent); and Charleston, South Carolina (up 2 percent).
Top loan originators for 2017
The table below shows the top 16 mortgage originators in 2017 based on dollar volume of loans. This includes all lenders with at least $10 billion in total loan origination volume for the year.
ATTOM Data Solutions analyzed recorded mortgage and deed of trust data for single family homes, condos, town homes and multi-family properties of two to four units for this report. Each recorded mortgage or deed of trust was counted as a separate loan origination. Dollar volume was calculated by multiplying the total number of loan originations by the average loan amount for those loan originations. Origination counts and dollar volumes are projected for the most recent two quarters based on historical share of mortgage and deed of trust data recorded and collected within 45 days from the end of a quarter — which is when ATTOM pulls data for the report.
About ATTOM Data Solutions
ATTOM Data Solutions blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties multi-sourced from more than 3,000 U.S. counties. A rigorous data management process involving more than 20 steps validates, standardizes and enhances the data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. With more than 29.6 billion rows of transactional-level data and more than 7,200 discrete data attributes, the 9TB ATTOM data warehouse powers real estate transparency for innovators, entrepreneurs, disrupters, developers, marketers, policymakers, and analysts through flexible delivery solutions, including bulk file licenses, APIs and customized reports.
Data and Report Licensing:
Please contact us if you have questions about the underlying data referenced in this article, or would like to have access to that data in the form of custom reports, API, Bulk File or DaaS.