U.S. Home Refinance Originations Post 20 Percent Annual Increase In Q4 2016 Even As Purchase Originations Decline

IRVINE, Calif., March 2, 2017 /PRNewswire/ -- ATTOM Data Solutions, curator of the nation's largest fused property database, today released its Q4 2016 U.S. Residential Property Loan Origination Report, which shows more than 1.7 million (1,748,177) loans were originated on U.S. residential properties (1 to 4 units) in the fourth quarter of 2016, down 15 percent from the previous quarter but still up 2 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 950 counties accounting for more than 80 percent of the U.S. population (see full methodology below).

"Refinance originations continued to post strong numbers compared to a year ago in the fourth quarter even as purchase originations decreased on a year-over-year basis for the second consecutive quarter," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "The increase in refinance originations is surprising given the rising interest rates in the fourth quarter, but many homeowners may have been trying to lock in still relatively low interest rates before those interest rates rose further.

"On the other hand, rising interest rates did seem to have a chilling effect on homebuyers using financing, as evidenced not only by the drop in purchase loan originations but also a corresponding rise in the share of cash buyers, drop in FHA buyer share and a rise in the average down payment percentage in the fourth quarter compared to the previous quarter," Blomquist added.

Purchase loan originations down for second consecutive quarter
A total of 595,500 purchase loans secured by U.S. residential property were originated in Q4 2016, down 26 percent from the previous quarter and down 12 percent from a year ago — the second consecutive quarter with a year-over-year decrease following eight consecutive quarters of year-over-year increases.

Non-banks gaining share, big banks losing share in purchase loan originations
Among the top five purchase loan originators, three non-banks all saw year-over-year increases in purchase loan originations: Quicken up 4 percent; Caliber Home Loans up 21 percent; and Fairway up 19 percent. Meanwhile the two traditional big banks in the top five both posted year-over-year decreases in purchase loan activity in Q4 2016: Wells Fargo down 5 percent; and JP Morgan Chase down 15 percent.

Refinance originations increase 20 percent from year ago
A total of 883,836 refinance loans secured by U.S. residential properties were originated in Q4 2016, down 6 percent from the previous quarter but still up 20 percent from a year ago — the second consecutive quarter with a year-over-year increase.

HELOC originations down 9 percent from year ago
A total of 268,841 Home Equity Lines of Credit (HELOCs) were originated during the fourth quarter, down 16 percent from the previous quarter and down 12 percent from a year ago.

VA loan share pulls back from record high
VA loans originated in Q4 2016 accounted for 8.7 percent of all loans originated during the quarter, down from a record high of 8.8 percent in the previous quarter but still up from 7.4 percent a year ago.

FHA loan share drops to two-year low
FHA loans originated in Q4 2016 accounted for 15.3 percent of all loans originated during the quarter, down from 16.4 percent in the previous quarter, and down from 17.6 percent a year ago to the lowest level in two years — since Q4 2014.

Report methodology
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.

About ATTOM Data Solutions
ATTOM Data Solutions is the curator of the ATTOM Data Warehouse, a multi-sourced national property database that blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, health hazards, neighborhood characteristics and other property characteristic data for more than 150 million U.S. residential and commercial properties. The ATTOM Data Warehouse delivers actionable data to businesses, consumers, government agencies, universities, policymakers and the media in multiple ways, including bulk file licenses, APIs and customized reports.

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SOURCE ATTOM Data Solutions

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