Fewer Purchase Loans, More Refi in Q3 | Think Realty | A Real Estate of Mind
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Fewer Purchase Loans, More Refi in Q3

Fewer New Home Sales Refi Loans Up

Home loan originations were down about 2 percent in the third quarter compared to the second, though up 1 percent compared to a year earlier. The value of the loans was bigger, too—$502 billion, 8 percent higher than the same timeframe in 2015.

If you dig deeper into the numbers, though, refinance loans saw larger increases.

“The nominal increase in overall originations compared to a year ago masks divergent refinance and purchase loan origination trends during the quarter,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.

“Refinance originations increased 16 percent compared to a year ago while purchase originations were down 11 percent and Home Equity Lines of Credit (HELOC) originations were down 6 percent. Uncertainty surrounding the outcome of the presidential election may have kept some would-be homebuyers on the sidelines while the prospect of rising interest rates following the election may have prompted many homeowners to refinance to lock in low interest rates.”

The biggest decreases in purchase loan originations were in Raleigh (a 37 percent decline) and Houston (29 percent decline). The biggest gains in purchase originations could be seen in Boise and Lancaster, Pennsylvania.