But don't read too much into one great quarter, ATTOM says
The mortgage market saw one of its biggest boosts in years during the second quarter, with origination numbers bouncing back after a prolonged slump. However, experts cautioned lenders not to overinterpret the data.
About 1.62 million mortgages ($533 billion in loans) were issued for residential properties, a significant 23.2% jump from the previous quarter, according to an ATTOM report.
The rebound was driven by the typical Spring homebuying season and slightly more favorable mortgage rates. According to the Mortgage Bankers Association, the average 30-year mortgage rate is now at 6.44%.
However, despite the positive momentum, the report suggested the increase may be more of an outlier than a trend. MBA reported that mortgage application activity has been muted, increasing just 0.5% over the week.
Read more: Mortgage rates fall, but buyers hold off
“A cautionary note is warranted, as we shouldn’t read too much into one great quarter. A similar trend occurred last Spring, with lending dropping off significantly later in the year,” said ATTOM chief executive officer Rob Barber.
While the second quarter’s gains have helped recover some ground after three consecutive quarters of decline, the total residential lending is still 1.6% lower than the same period last year and remained 61.2% below the 2021 peak.
The rebound was also widespread across different types of loans, with home purchase loans jumping 32.7%, refinance deals rising 10.3%, and home-equity credit lines increasing by 26.5%.
But it’s possible, Barber said, that mortgage lending could see further gains or at least maintain current levels throughout the rest of the year.
“But with interest rates settling down and projections for more cuts from the Federal Reserve over the coming months, it wouldn’t be surprising if business increased even more for lenders over the rest of 2024, or at least didn’t drop significantly,” he said in the report.
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