The US housing market continued its downward trend in the first quarter of 2024, with the number of mortgages originated reaching its lowest level since 2000, according to a report by ATTOM Data.
Key Findings:
11th Quarter of Decline: Mortgage originations fell by 6.8% compared to the previous quarter, marking the 11th consecutive quarter of decline.
Lowest Level Since 2000: The 1.28 million mortgages originated represent a 69.3% drop from the peak in 2021 and the lowest level in 22 years.
Year-over-Year Decline: Overall residential lending activity is down 4.8% compared to the first quarter of 2023.
Rising Rates and High Prices: Rising mortgage interest rates combined with near-record home prices are making homeownership increasingly unaffordable for many Americans.
Limited Inventory: A low supply of homes for sale is further hindering purchase activity.
Decrease Across All Loan Types:
The report highlights a decrease in all major loan categories:
- Purchase Loans: Down 9.9% to 565,000
- Refinance Loans: Down 1.9% to 491,000
- Home Equity Lines of Credit: Down 9% to 222,000
Limited Upside Predicted:
ATTOM suggests a potential rebound in the second quarter due to the peak home-buying season in 2023. However, with no signs of significant interest rate reductions or increased housing inventory, any improvement is likely to be modest, at best.
Analyst’s View:
“The housing market is facing a tough situation,” says Rob Barber, CEO at ATTOM. “High interest rates and limited affordability are squeezing potential homebuyers, while a lack of inventory makes it even harder to find a suitable property.”
The Road Ahead:
The housing market slowdown raises concerns about affordability and accessibility for aspiring homeowners. A turnaround hinges on factors like a potential decrease in mortgage rates or an increase in available homes for sale.
