A 12% jump in refinance activity accounted for a large portion of the $1.16 trillion worth of mortgages originated from January through March.

Refinances continued to drive residential lending across the United States during the first quarter, with total lending up 3% quarterly and refi activity up 12% during the year’s first three months. That’s according to Attom Data Solutions, which found that lenders originated 3.77 million loans secured by residential properties (one to four units) from January through March. That’s the highest level of lending in more than 14 years, up 71% from the same period in 2020.  The quarterly bump marked the first time since 2009 that the total number of home loans increased from a fourth quarter to a first quarter.  Lenders originated $1.16 trillion worth of mortgages in the first quarter, up 5% from the fourth quarter of 2020 and 81% from a year ago. The first quarter’s total dollar amount was the largest quarterly figure since at least 2000.  Notably, the refi boom continued well into the first quarter of 2021, with the quarterly increase in refi activity outpacing the drops in both purchase lending and home equity lines of credit (HELOCs).  “Homeowners lined up to refinance their loans in ever-growing numbers during the first quarter of 2021, making for a highly unusual quarterly increase in total lending activity for that time of year,” said Todd Teta, chief product officer at Attom. “The home-mortgage industry almost always slows down in winter, but not this year because of so many homeowners hopping on super-low interest rates to reduce their monthly payments.”  The dollar volume of refinance packages grew to $777.5 billion in the first quarter, up 13.6% from the fourth quarter of 2020 and 114.1% from the first quarter of 2020.   “Eventually, the refi side of the lending business will ease up after enough homeowners get in on the good deals,” Teta added. “But there’s no sign of that happening in the very near future – yet another indicator of how the housing market remains strong amid uncertain economic times connected to the pandemic.”

Source: Scotsman Guide