Thu Jun 20 22:13:49 EDT 2024
Home#OpEdUS Housing Market Slumps as Mortgage Originations Reach 22-Year Low

US Housing Market Slumps as Mortgage Originations Reach 22-Year Low

Mortgage Originations Down to Lowest Level in 22 Years

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.

Paul Williams
Paul Williams
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