Residential mortgage lending in the second quarter of 2022 fell at its fastest pace in eight years, according to new data from ATTOM, a real estate data curator.

2.39 million residential real estate loans were issued in the second quarter, marking the fifth consecutive quarterly decline. This figure is down 13% from the previous quarter and 40% from last year.

The drop in total activity, despite a slight increase in purchase loan activity, is attributed to a massive reduction in refinance activity, which also fell for the fifth consecutive quarter.

According to the report, only 941,000 residential loans were converted into new mortgages during the second quarter, the lowest level in three years. This figure marks a 36% drop from the previous quarter and a 60% drop from a year ago.

Main findings:

  • Banks and other lenders issued 2,385,051 residential mortgages in the second quarter of 2022, down 13% from last quarter and 40% from a year ago.
  • Lenders issued just under a million residential refinance mortgages in the second quarter of 2022, the lowest number since the second quarter of 2019.
  • A total of 341,704 home equity lines of credit (HELOCs) were created on residential properties in the second quarter, up 34.5% from the previous quarter and 43.8% from a year ago .
  • FHA-backed mortgages increased as a share of all loans for the third consecutive quarter, accounting for 10.7% of all residential real estate loans taken out in the second quarter of 2022.
  • The national median down payment on homes purchased with financing increased in the second quarter of 2022 after declining in the previous two quarters, while the typical amount borrowed hit a new high.

Take-out:

“Mortgage rates that have nearly doubled over the past year have decimated the refinance market and are also starting to weigh on purchase lending,” said Rick Sharga, executive vice president of market intelligence. at ATTOM. “The combination of much higher mortgage rates and rising home prices has made the notion of buying a home simply unaffordable for many potential buyers, which threatens to further depress mortgage lending volumes. late spring and summer months.

“Borrowers looking to tap into their equity should be aware that HELOC activity has been particularly strong among credit unions and community banks, as well as a small but growing number of custodian banks,” Sharga noted. “Although non-bank mortgage lenders may begin to offer home equity loans more aggressively, they are unlikely to actively participate in the HELOC market.”