The trend is pushing an increase in purchase loan originations despite affordability and supply challenges
More homebuyers took out mortgages with co-borrowers during the second quarter as competition continues specially in high-priced markets, according to the second-quarter US Residential Property Loan Origination Report by ATTOM Data Solutions.
Of all purchase loan originations on single-family homes during the period, 22.8% involved co-borrowers, an increase from 21.3% in the previous quarter and the 20.5% in the year-ago period. There were 2,033,296 loans originated on US residential properties during the period, a 27% increase from the previous quarter but a 12% decrease from the same quarter last year.
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"Homebuyers are increasingly relying on co-borrowers to help with home purchases, particularly in high-priced markets where sizable down payments are necessary to compete," said Daren Blomquist, senior vice president at ATTOM. "This rising trend in co-borrowing is helping to eke out increases in purchase loan originations despite affordability and supply constraints."
The report found that among cities with at least 1,500 purchase loan originations on single-family homes during the quarter, San Jose, Calif., had the highest share of co-borrower originations at 50.9%. Other cities with large percentages of co-borrowers were Miami, Fla., (45.2%); Seattle, Wash., (39.1%); Los Angeles (31.1%); and San Diego (29.4%).
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Additionally, ATTOM reported that the median down payment percentage increased during the quarter. For single-family homes and condos purchased with financing during the period, the median down payment was $18,850, which is 7.3% of the median price of all purchased homes. The quarter figure represents the highest level since the 7.4% recorded in the third quarter of 2014.
