Overall loan activity dropped -8% in Q3 2021, the largest quarterly dip in over a year.

Loan Activity Fell -8% in Q3 2021

Total loan activity dropped by -8% during the third quarter of 2021 despite loan originations increasing +3% from Q3 2020, according to ATTOM Data Solutions’ Q3 2021 US Residential Property Mortgage Origination report.

This quarterly decline was the first time in more than two years that total lending fell during two consecutive quarters.  It was also the first time in any year since at least 2000 that lending activity dropped in both the second and third quarters.

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Refinance mortgages remained the majority of all residential activity, 55%, during Q3 2021 but it was down from 59% in both Q2 2021 and Q3 2020.   The dollar volume of refinance loans fell to $624.1B, down -10% compared with Q2 2021 but still up +1% y/y.

Lenders issued $1.15T worth of mortgages in Q3 2021, an increase of +11% y/y but down -6% q/q.  Purchas loans came in at 1.36M mortgages to buyers, down -2% q/q but still up +17% y/y.  The dollar value of those property loans totaled $482.6B

Are Buying Trends Reversing?

Total lending activity nearly tripled from early 2019 through early 2021.   Q2 and Q3 2021 are pointing to a reversal.

“The overflow stack of work that was hitting lenders for several years shrank again in the third quarter across the US amid a few emerging trends,” said Todd Teta, chief product officer with ATTOM.  “It looks more and more like homeowner’s voracious appetites for refinance deals has eased notably, while purchase lending also dipped.  It’s still too early to say if the trends point to major shifts in lending patters or the broader housing market boom.  But the drop-off is significant, especially for home buying, which could suggest an impending housing market slowdown.  We will be watching the lending trends extra closely in the coming months.”

Overall Lending Activity Down Quarterly in 58% of Metros

Total lending was down at least -5% in 126 metros during Q3 2021.  The largest quarterly decreases occurred in…

  • Pittsburgh PA – -52.3%
  • Charleston SC – -48.2%
  • Myrtle Beach SC – -46.8%
  • Provo UT – -39.5%
  • Peoria IL – -33.9%
  • Buffalo NY – -29.8%
  • Baltimore MD – -20.9%
  • New Orleans LA – -20.4%
  • Atlanta GA – -17.5%

Metros with the biggest increases in mortgage lending during Q3 2021 included:

  • Ann Arbor MI – +1222.7%
  • Des Moines IA – +70.5%
  • Sioux Falls SD – +51.5%
  • Yakima WA – +31.4%
  • Dayton OH – +30.6%

Thanks to ATTOM Data Solutions.

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